Thursday, March 31, 2011
The race for acres is on. In fact, it is heating up as farmers respond to the weather and crop prices to plant their 2011 crop.
Corn is still our number on U.S. crop and demand is large. You might call it huge. But soybeans is very far behind to supply the world's protein and oil needs.
The traders and hedgers are trying to figure out what to gamble on because the supply is so tight to demand, any little glitch will make the market run one way or another.
This farmer made a good post with his prediction. No one knows what the final acreage of each crop will be but the market does influence planting.
Weather is number one. I rely on wheat and soybeans more because of my rolling, eroded hills and management plan. I am not a traditional corn and soybean farmer here in the east where we raise good soybeans and wheat keeps my soil from eroding so much.
The market is very volatile and the price will move when the USDA releases their intended acreage report today.
Here is a news flash I just got which will affect the markets this year.
USDA's prospective plantings report shows farmers intend to plant 245 million acres of the five major crops, up from 236 million last year, and above USDA's estimate in its annual Agricultural Outlook Forum, which was greeted with skepticism at the time..
The estimate of 92.18 million acres of corn eases supply concerns modestly compared with the pre-report estimate of 91.84. USDA's soybean acreage, at 77.4 million, is within the pre-report trade estimates but above average expectations.
Corn and bean stocks were below expectations; slightly more wheat and sorghum on hand than the trade was looking for.
USDA's prospective corn plantings are modestly above pre-report expectations, which averaged 91.84. This could slightly ease supply concerns. But in order for ending stocks to use to gain in 2011-12, corn plantings would need to total an ambitious 93.4 million acres, according to DTN Senior Analyst Darin Newsom
Farmers told USDA they plan to plant 77.4 million acres. This is more than the average pre-report estimate of 76.9 million and equal to last year.
At 58.02 million acres, all wheat also is higher than the expected average of 57.3 million. Winter is pegged at 41.2; spring at 14.4 and durum at 2.4. Today's intentions report can't account for changes in spring wheat reductions due to flooding, which eventually may lead to a decrease in acres compared with the 13.7 million planted in 2010, according to Newsom.
Cotton acres, at 12.57 million, are up 15 percent from 10.97 million last year, but are surprisingly low given average trade expectations of 13.15 and a low projection of 12.97.
Pre-report estimates for corn stocks on hand at the end of February averaged 6.69 billion bushels, suggesting usage well above the five-year average pace for the second quarter.
The actual number came in at 6.52 billion, indicating December-February disappearance of 3.53 billion, up from 3.21 billion during the same period last year. This was even stronger use than expected on average, though at the exact lower end of the pre-report estimate range.
Soybean quarterly stocks were expected to come in at 1.299 billion bushels, representing second-quarter usage as a percent of supplies near the five-year average.
Soybean stocks were announced at 1.249, slightly below average expectations and below the 1.266 lowest projection. It represents disappearance of 1.03 billion bushels, a 4 percent decrease in usage compared with the same period a year ago.
The average pre-report estimate for all wheat ending stocks was 1.399 billion bushels, slightly above the 5-year average usage pace at this stage of the marketing year.
With wheat stocks pegged at 1.425 billion bushels, they are slightly above average expectations but within the pre-report range. The disappearance of 508 million bushels is up 20 percent from the same period a year earlier.
ACREAGE (million acres) Actual USDA Outlook
3/31/11 Average High Low 2010-2011 2010-2011
Corn 92.18 91.84 92.60 91.00 88.19 92.00
Soybeans 76.61 76.87 78.50 75.00 77.40 78.00
All Wheat 58.02 57.29 58.40 56.00 53.60 57.00
Winter 41.23 41.10 42.90 40.20 37.34
Spring 14.43 13.73 14.31 13.00 13.70
Durum 2.37 2.55 2.80 2.40 2.57
Grain Sorghum 5.65 6.65 6.75 6.50 5.40
Cotton 12.57 13.15 13.22 12.97 10.97 13.00