PF Reaction: Markets Soar on Shocking Planted Acreage Estimates

Posted on Wed, 03/31/2021 - 12:03

Market reaction

Ahead of USDA's reports, corn futures were trading 2 to 3 cents lower, soybeans were 13 to 16 cents higher, wheat futures were 2 to 5 cents lower and cotton futures were 55 to 90 points lower.

Following the release of bullish reports, corn and soybean futures locked their 25-cent and 70-cent limits higher, respectively. Wheat futures have also shot 13 to 17 cents higher, with SRW wheat leading gains. Cotton futures are 45 to 115 points higher.

 

Prospective Plantings Report

Corn: 91.144 mil. acres; trade expected 93.208 mil. acres
— compares to 90.819 mil. acres in 2020
Soybeans: 87.600 mil. acres; traders expected 89.996 mil. acres
— compares to 83.084 mil. acres in 2020
All wheat: 46.358 mil. acres; traders expected 44.971 mil. acres
— compares to 44.349 mil. acres in 2020
Other spring wheat: 11.740 mil. acres; traders expected 11.644 mil. acres
— compares to 12.250 mil. acres in 2020
Durum: 1.540 mil. acres; traders expected 1.641 mil. acres
— compares to 1.684 mil. acres in 2020
Cotton: 12.036 mil. acres; traders expected 11.905 mil. acres
— compares to 12.093 mil. acres in 2020

Total area planted to principal crops this year is expected to rise around 6 million to 316.2 million acres, which would be the highest since 2018. However, that’s 3.2 million acres less than analysis of our survey data indicated. Combined corn and soybean acres at 178.7 million acres would be up 4.8 million acres from last year but 1.6 million acres less than the record of 180.3 million acres in 2017. Given strong new-crop prices, we anticipate corn and soybean acres will increase from USDA’s March intentions, especially if spring weather is favorable for planting.

March planting intentions for corn are up only 325,000 acres from last year and nearly 2.1 million acres less than the average pre-report estimate. Intended corn acres are around 2.3 million acres less than our early March survey indicated.

Compared with last year, corn planted acres are expected to rise in North Dakota (up 1.35 million acres to 3.3 million acres), South Dakota (up 650,000 acres to 5.6 million acres) and Wisconsin (up 150,000 acres to 4.15 million acres). USDA expects corn acres to be unchanged in Minnesota (8 million acres). USDA estimates corn acres will decline in Illinois (down 400,000 acres to 10.9 million acres), Indiana (down 200,000 acres to 5.2 million acres), Iowa (down 400,000 acres to 13.2 million acres), Kansas (down 300,000 acres to 5.8 million acres), Michigan (down 100,000 acres to 2.25 million acres), Missouri (down 50,000 acres to 3.4 million acres), Nebraska (down 300,000 acres to 9.9 million acres) and Ohio (down 150,000 acres to 3.4 million acres).

USDA’s March planting intentions for soybeans are up 4.5 million acres from last year but 2.4 million acres lower than traders anticipated. Soybean acres are 1.3 million acres less than our survey indicated. 

Compared with last year, soybean planted acres are expected to rise in Arkansas (up 180,000 acres to 3.0 million acres), Illinois (up 400,000 acres to 10.7 million acres), Indiana (up 100,000 acres to 5.8 million acres), Iowa (up 400,000 acres to 9.8 million acres), Michigan (up 50,000 acres to 2.25 million acres), Minnesota (up 400,000 acres to 7.8 million acres), Nebraska (up 300,000 acres to 5.5 million acres), North Dakota (up 1.25 million to 7.0 million acres), Ohio (up 100,000 acres to 5.0 million acres), South Dakota (750,000 acres to 5.7 million acres) and Wisconsin (up 250,000 acres to 2.25 million acres). USDA estimates soybean plantings will decline in Kansas (down 50,000 acres to 4.7 million acres) and Missouri (down 50,000 acres to 5.8 million acres).

Farmers told USDA they intend to plant 510,000 fewer acres to spring wheat this year, though that would be around 100,000 acres more than traders anticipated and our survey indicated.

Compared with last year, spring wheat acres are expected to decline in Minnesota (down 50,000 acres to 1.38 million acres), Montana (down 400,000 acres to 2.9 million acres), North Dakota (down 100,000 acres to 5.6 million acres) and South Dakota (down 20,000 acres to 750,000 acres).  USDA estimates spring wheat acres will increase in Idaho (up 20,000 acres to 530,000 acres) and Washington (up 40,000 acres to 580,000 acres).

USDA data indicates March durum planting intentions are down 144,000 acres from last year and 100,000 acres less than traders anticipated. Intended durum acres are 260,000 acres less than our survey indicated.

Cotton plantings are expected to be down just a tick from last year and 131,000 acres higher than pre-report expectations. Cotton acreage intentions came in 164,000 acres fewer than our survey indicated. Cotton acres are expected to drop 18,000 acres in Texas to 6.82 million acres. Cotton plantings are expected to rise 10,000 acres in Georgia to 1.2 million acres.

 

Quarterly Grain Stocks Report

Corn: 7.701 billion bu.; traders expected 7.767 billion bu.
— compares to 11.294 bil. bu. on Dec. 1; 7.952 bil. bu. on March 1, 2020
Soybeans: 1.564 billion bu.; traders expected 1.534 billion bu.
— compares to 2.933 bil. bu. on Dec. 1; 2.255 bil. bu. on March 1, 2020
Wheat: 1.314 billion bu.; traders expected 1.272 billion bu.
— compares to 1.674 bil. bu. on Dec. 1; 1.415 bil. bu. on March 1, 2020

March 1 corn stocks are down 3.2% from year-ago and are 66 million bu. below the average pre-report trade estimate. The stocks tally is, however, within the range of pre-report trade guesses. USDA reports on-farm stocks of 4.037 billion bu., down 9.4% from year. Off-farm corn stocks are estimated at 3.664 billion bu., up 4.7% from year-ago. Implied disappearance in the second quarter of the 2020-21 marketing year of 3.59 billion bu. is up 6.2% from year-ago.

March 1 soybean stocks are 30 million bu. above the average pre-report trade estimate, but are down 30.6% from year-ago levels. Beans stocked on farms are estimated at 594 million bu., down 41.3% from year-ago levels. Off-farm soybean stocks totaled 970.2 million bu., down 22.0% from year-ago. Implied use in the second quarter of the marketing year is 1.38 billion bu., up 39% from the same period last year.

March 1 all-wheat stocks are down 7.1% from year-ago but are 42 million bu. above the average pre-report trade estimate. On-farm wheat stocks of 283.92 million bu. are down 16.2% from year-ago. Off-farm wheat stocks of 1.03 billion bu. are down 4.3% from last year. Indicated disappearance of wheat in the third quarter of the 2020-21 marketing year of 388 million bu. is down 9% from the same period last year. Durum wheat stocks in all positions are down 16.9% from year-ago.