We know planting intentions, but actual acreage remains unknown

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Thursday’s USDA reports ground corn and soybean market bulls into hamburger as large acreage and higher than expected stocks pushed markets down hard, and limit down in the case of the three front months on corn. 

The 2013 planting intentions projected a record high for a combination of corn and soybeans, following record high prices in the drought-stricken 2012 growing season.  Farmers may have wanted to take advantage of more high prices and have indicated intentions of planting more acres.  Details and perspectives follow.

Corn growers intend to plant 97.282 million acres of corn for all purposes in 2013, up slightly from last year and 6 percent higher than in 2011. If that happens, it would be the highest planted acreage in the US since 1936 when farmers planted about 102 million acres.  The numbers came from the Prospective Plantings Report.

Corn Belt State corn data (acres):

State

2013 intentions

2012 acreage

IL

12,200,000

12,800,000

IN

6,100,000

6,250,000

IA

14,200,000

14,200,000

KS

4,600,000

4,700,000

MI

2,600,000

2,650,000

MN

9,000,000

8,750,000

MO

3,400,000

3,600,000

NE

9,900,000

10,000,000

ND

4,100,000

3,600,000

OH

3,950,000

3,900,000

SD

5,900,000

6,150,000

WI

4,350,000

4,350,000

Total

80,300,000

80,950,000

Within the Corn Belt, there will be a 650,000 acreage cut compared to 2012, with Illinois contributing 600,000 of that.  The Illinois Corn Growers Association President Paul Taylor said shortly after the release of the report that the drought hurt yields for many of his members, particularly those who had been raising corn after corn, and many were returning to a corn-soybean rotation.  While the balance of Corn Belt acreage may not be that much of a surprise, there are other states that have significantly increased their planned corn acres, such as:

  • Arkansas—141 percent
  • Arizona—113 percent
  • Georgia—143 percent
  • Mississippi—128 percent
  • Texas—114 percent

While these states are not major corn producers, their acreage will grow in relative terms.  But such expansion is not going to be on high-yielding ground.  North Dakota is a state with a 114 percent increase in corn acres, but the question could be asked if $5 corn prices will be attractive enough to displace $7.80 wheat acres.

Across the Sunbelt, acreage has also increased nearly 1 million acres in an effort to take advantage of early harvest premiums. September was offering a 26 cent premium to December corn, which may have helped make quick decisions.  Those states and increased acreage from last year include:

  • Arkansas—280,000
  • Georgia—150,000
  • Mississippi—230,000
  • Texas—250,000

Soybean planted area for 2013 is estimated at 77.126 million acres, down slightly from 2012 but the fourth highest on record, if it comes about.

Corn Belt State soybean data (acres):

State

2013 intentions

2012 acreage

IL

9,400,000

9,050,000

IN

5,100,000

5,150,000

IA

9,400,000

9,350,000

KS

3,900,000

4,000,000

MI

2,100,000

2,000,000

MN

6,800,000

7,050,000

MO

5,300,000

5,400,000

NE

4,700,000

5,050,000

ND

4,900,000

4,750,000

OH

4,650,000

4,600,000

SD

4,600,000

4,750,000

WI

1,700,000

1,710,000

total

62,550,000

62,860,000

Compared with 2012, planted area is down across the Great Plains with the exception of North Dakota. The largest acreage increase was in Illinois with a 350,000 gain, likely from corn acres, as many farmers return to a more traditional rotation. Nationally, the largest percentage increases for soybean acres were 121 percent in Alabama, 119 percent in Florida, and 127 percent in Georgia.  However, those three states only added a combined total of 134,000 acres.

Grain Stocks Report

Also released Thursday was the March 1 Quarterly Grain Stocks reportCorn stocks in all positions on March 1, 2013 totaled 5.40 billion bushels, down 10 percent from March 1, 2012. USDA calculated, “Of the total stocks, 2.67 billion bushels are stored on farms, down 16 percent from a year earlier. Off-farm stocks, at 2.73 billion bushels, are down 4 percent from a year ago. The December 2012 - February 2013 indicated disappearance is 2.63 billion bushels, compared with 3.62 billion bushels during the same period last year.”

However the market was anticipating close to 5 billion, instead of 5.4 billion bushels and the market declined the 40-cent limit for old crop contracts. One market observer added, “Corn usage typically drops 17 percent from 1st Qtr to 2nd Qtr. USDA data suggests it dropped 32 percent this time; biggest drop in nearly 3 decades.”  The decline in use was 1.087 billion bushels.

Soybeans stored in all positions on March 1, 2013 totaled 999 million bushels, down 27 percent from March 1, 2012. USDA reported, “Soybean stocks stored on farms are estimated at 457 million bushels, down 18 percent from a year ago. Off-farm stocks, at 543 million bushels, are down 34 percent from last March. Indicated disappearance for the December 2012 - February 2013 quarter totaled 967 million bushels, down 3 percent from the same period a year earlier.”

While stocks are down, they were not down to the 935 million bushel level the market expected.  The 2003-2004 marketing year was the only other time second quarter stocks were as small.

Summary:

The acreage report from USDA was within the range of expectations of the market, however, futures prices were diminished because of expected large production, as well as more corn stocks than what the market anticipated.  The additional 400 million bushels of corn will relieve pressure, but also indicates less was fed in the second quarter than expected.

Source: FarmGate blog



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Ken    
Batavia, NY  |  April, 01, 2013 at 11:56 AM

I do not trust reports like this. The remaining stock of corn is up 400 million bushels??? Really? Smells like a burning spreader load of you know what.

rick    
April, 02, 2013 at 06:34 AM

The planting intentions are just about the same as last year. Last year farmers had an excellent planting season but already the weather is much colder and spring is being pushed back. The USDA quarterly stocks are 400 million bushel larger than the all the other analyst expectations. Has the USDA ever been wrong before? Somebody is counting their chickens way before the crop is even planted.


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