On March 31, USDA released the Prospective Plantings Report and quarterly Grain Stocks Report. These were very highly anticipated USDA Reports, due to the uncertainty in corn prices and soybean prices in recent months, as well as with the potential for large increases in USDA estimated grain stocks in the coming year. Typically, these late March USDA reports are very critical to farm operators and grain traders because these reports tend to have a high impact on grain market prices in the spring and early summer. This is the time of the year when many farm operators try to sell remaining grain inventories from the previous growing season, as well as look for opportunities to forward price a portion of the anticipated crop for the current year. In a majority of years, corn and soybean prices usually reach their peak price in the Spring months, from April until June.
Some key items from the March 31 reports include:
- Indicated intended corn planting acres of 91.7 million acres for 2014, which is down 4% from the 95.4 million planted acres in 2013, and well below the 97.2 million acres planted in 2012. If achieved, the 2014 planted corn acres would be the lowest since 2010; however, it will still be the fifth largest total corn acreage since 1944.
- The corn stocks on March 1, 2014, were listed at 7.01 billion bushels, which is up 30% from the 5.40 billion bushels on March 1, 2013, and is slightly below grain trade estimates prior to the USDA report.
- Indicated intended soybean planting acres of 81.5 million acres in 2014, which is up 6% from the 76.5 million acres of soybeans in 2013, and is well above the 77.2 million acres planted in 2012. If achieved, the 2014 soybean acreage would be the highest in history, with acreage gains in nearly every major soybean producing state.
- Soybean stocks on March 1, 2014, were listed at 992 million bushels, which is down slightly from 998 million bushels on March 1, 2013, and is slightly below the pre-report estimates by the grain trade industry.
The state-by-state Prospective Plantings Report for 2014 is also rather interesting. In Minnesota, growers are expected to plant 8.6 million acres of corn in 2014, which is the same as in 2013, but is below the 8.75 million acres planted in 2012. Minnesota farmers are expected to plant 7.4 million acres of soybeans in 2014, which is up 10% from the 6.7 million acres of soybeans in 2013, and is also above the 7.1 million soybean acres planted in 2012. Prospective plantings for 2014 in Iowa indicated 14.0 million acres of corn in 2014, which is 2% higher than the 13.6 million corn acres in 2013, and is slightly below the 2012 level of 14.2 million acres. The 2014 planted soybean acreage in Iowa is estimated at 9.6 million acres, which is up 3% from 9.3 million acres in both 2013 and 2012.
Prospective corn acres for 2014 in Illinois and Indiana showed a slight decrease, as compared to 2013 corn acreage, with expected 2014 corn acreage in Nebraska and South Dakota projected to decline more significantly at 6% in each state. Nebraska is expected to have 600,000 more soybean acres in 2014 than 2013, or a 13% increase. Other projected increases in soybean acres for 2014 compared to 2013 are Indiana at 6%, South Dakota at 4%, and Illinois at 1%.
North Dakota is estimated to have the largest increase in the U.S. in soybean acres from 2013 to 2014, with a 22% increase, representing 1 million additional acres. For 2014, North Dakota is expected to grow 5.65 million acres of soybeans and 2.95 million acres of corn. It appears that the intended 2014 corn acres are being reduced most significantly in the Southern states.
The March 31 USDA Grain Stocks Report indicated that as of March 1, 2014, there were about 3.86 billion bushels of corn and nearly 382 million bushels of soybeans stored on farms in the U.S., which represents about 55% of the total corn stocks and 39% of the total soybean stocks. The March 1, 2014, on-farm grain stocks compare to nearly 2.7 billion bushels of corn and 457 million bushels of soybeans in on-farm storage on March 1, 2013. According to the USDA report, there were 570 million bushels of corn and 59 million bushels of soybeans in on-farm storage in Minnesota on March 1, 2014, compared to 540 million bushels of corn and 75 million bushels of soybeans a year earlier in 2013.
USDA does not survey the percentage of the bushels in on-farm storage that are forward priced for future delivery, as compared to bushels that are not priced. However, many private analysts feel that a much higher percentage of the corn and soybean bushels still in storage on March 1, 2014, may not be forward priced, as compared to a typical year, due to the drop in market prices following harvest in 2013. The large amount of corn and soybean bushels in on-farm storage, much of which is probably not priced, will likely make the grain market trends in the next few months very important for selling the remaining inventories, as well as for pricing the new-crop 2014 corn and soybeans.