Prospective Plantings Report Bullish for Corn and Soybeans
The USDA released their quarterly Grain Stocks report and their Prospective Plantings report on Thursday, with the plantings report containing some surprises. Corn planted area is estimated at 88 million acres, and soybean planted area is at 89 million acres. Both of those numbers down from a year ago.
Arlan Suderman, Chief Commodities Economist at INTL FCStone says the Prospective Plantings report was a bullish one for corn and soybeans. One of the big surprises was the decline of soybeans in almost all of the Midwest (excluding Indiana) and the Plains.
“Whether that plays out or not, I think, is going to have a lot to do with what May weather is like. And then what prices are at in June when they contemplate double cropping acres. When it comes to corn and spring wheat, I think that was one of the big surprises. A big shift in acres in Minnesota and North Dakota, about 750-800 million acres right there, going from corn to spring wheat. That region is expected to have a cold, wet April, which is when you’d want to be planting the spring wheat. So, that may have something to do with it yet. In fact, we could even see some of those acres go back to soybeans.”
Corn and soybean stocks were both above expectations. Suderman says, “On the corn side, the assumption will be that feed usage is a little bit smaller, maybe, because were feeding more DDGs and displacing some of that corn. We’ll need to see that confirmed. We had a lot of cattle coming off a wheat pasture in the Plains, due to drought, at younger weights. Perhaps that doesn’t show up until the next quarterly stocks report. On the soybeans, that may have more to do with last year’s crop was a little bit bigger than what we first thought.”
November soybeans settled Thursday at 10.47 ¾, a gain of +31 ¼ ahead of the three-day weekend for the markets. December corn settled +14 ½ at 4.11 ½.
Suderman said, “Usually acreage surprises get traded for a few days, and then the focus is on planting conditions for the month of April. Usually the longer lasting surprises are in the stocks report, and stocks surprises were rather mild in this report.”
Corn planted area in Indiana is estimated at 5.1 million acres; down 5% from a year ago. Soybean planted area in Indiana is up 3% from last year at 6.1 million acres. If that soybean estimate comes to fruition, it would be the largest on record for Indiana.
