USDA’s Prospective Plantings and Quarterly Grain Stocks reports tend to produce big price moves, and this year was no different. Following the reports’ releases on Friday, prices surged for many commodities.
May corn prices were up almost 16¢ and December corn prices were up 6¢ for the week ending March 31. May soybean prices were up 76¢ and November soybean prices were up nearly 46¢. Wheat prices were up across the board — 3¢ to 37¢, depending on the contract.
USDA’s March plantings report shows:
- Corn: 91.9 million, up 4% from 2022
- Soybeans: 87.51 million, up slightly from 2022
- All Wheat: 49.9 million, up 9% from 2022
- Cotton: 11.3 million, down 18% from 2022
USDA’s Grain Stocks report showed:
- Corn stocks in all positions on March 1, 2023, totaled 7.40 billion bushels, down 5% from March 1, 2022. Of the total stocks, 4.11 billion bushels were stored on farms, up 1% from a year earlier. Off-farm stocks, at 3.29 billion bushels, are down 10% from a year ago. The December 2022 - February 2023 indicated disappearance is 3.42 billion bushels, compared with 3.88 billion bushels during the same period last year.
- Soybeans stored in all positions on March 1, 2023, totaled 1.69 billion bushels, down 13% from March 1, 2022. Soybean stocks stored on farms are estimated at 750 million bushels, down slightly from a year ago. Off-farm stocks, at 936 million bushels, are down 21% from last March. Indicated disappearance for the December 2022 - February 2023 quarter totaled 1.34 billion bushels, up 11% from the same period a year earlier.
“Once again, if hadn’t been for Friday the markets wouldn’t have been up as much, but we had, had an explosion,” says Jerry Gulke, president of Gulke Group. “We had a few surprises in the reports.”
Read More: Corn and Soybean Prices Soar Higher, Even With USDA’s Surprising March Prospective Plantings Report
Ahead of the reports, Gulke says, the guesses were all over the board for 2023 acres.
“With 92 million planted corn acres, our carryout comes in at 2.00 billion bushels,” he says. “This will make some people wish they’d sold some new-crop corn because 2-billion-bushel carryout is not $7 corn.”
In soybeans, both lower-than-expected stocks and slightly lower acres were friendly to prices.
“It looks like we’ve got pretty tight ending stocks for this year in soybeans,” Gulke says. “Then if those acres prove true, we won’t have a lot of room next year.”
Focus Shifts to Weather
With this data dump from USDA in the past, Gulke says the focus will shift to weather. With snow in the northern plains and wet weather in a lot of areas, planting seems far away.
“The weather looks cold and damp through the middle of April,” he says. “It is going to be a struggle to get in the field early, even in Illinois.”
With a now questionable weather forecast for the summer, Gulke warns farmers to be ready for price volatility.
“I think we got room for the price of grain to go up and go down and go up and go down all summer long,” he says. “So we just have to be careful what side of the trade you’re on and use tools that provide flexibility.”
Check the latest market prices in AgWeb’s Commodity Markets Center.
Jerry Gulke farms in Illinois and North Dakota. He is president of Gulke Group Advisory Services.
Learn more at GulkeGroup.com
Disclaimer: There is substantial risk of loss in trading futures or options, and each investor and trader must consider whether this is a suitable investment. There is no guarantee the advice we give will result in profitable trades. Past performance is not indicative of future results.
