March 31: A Key Crop-Report Day

Grain farmers usually wait for March 31 with great anticipation. That in part is because it will soon be April, when spring planting kicks into full gear. Yet March 31 also heralds one of USDA’s key crop reports of the year: The USDA Prospective Plantings And Quarterly Grain Stocks Reports. These early spring reports have typically been “market movers” in the past. 2004 is not likely to be an exception, given the current volatility in the grain markets.

It is important to remember that this is the “Planting Intentions Report,” and that the data was gathered from crop producers across the country in early March. So, it is subject to change as the planting season progresses. USDA, however, does not revise the anticipated crop plantings listed in the March 31 report -- and does not release any updated planting numbers the end of June. So, the March planting intention numbers tend to be a factor in the corn and soybean markets during the very important spring and early summer market period. The USDA Quarterly Grain Stocks Report, which is released on March 31, is also likely to be very important to the grain markets in the coming weeks. During the 20-year period from 1984 to 2003, corn and soybean prices moved higher or lower a very similar number of times following USDA’s grain stocks reports. But prices have remained neutral very few times.

The History Of The March Reports

Corn -- Anticipated corn planting acreage has been relatively steady in recent years -- around 80 million acres. In the last nine years, corn acreage has increased four years and decreased five years from the previous year. Most trade observers were estimating slightly over 80 million acres of corn to be planted in 2004, with a slight increase in acreage over the 2003 figure. The biggest increase in corn acreage from one year to the next in recent times was from 1995 to 1996, following the $5/bu. corn prices, when corn acreage rose by an estimated 4.6 million acres.

Soybeans -- There are a wide range of 2004 soybean acreage estimates from various trade observers. The average estimated for U.S. soybean acreage in the coming year is between 74 and 75 million acres. That will be an increase over 2003’s level and could surpass the record March 31, 2000, soybean acreage estimate of 74.266 million acres. From 1993 to 2002, soybean acreage in March 31 reports grew from one year to the next in every year except 2002. Since 1996, the first year of the Freedom to Farm Program, soybean acreage has risen by over 10 million acres. It is also important to note that USDA soybean acreage estimates have increased from the March 31 report to the June acreage report in eight of 10 years, from 1993-2002.

Price Movement -- USDA has published a summary that reviews cash price movement following USDA Quarterly Grain Stocks Reports from 1984 to 2003. The results are quite interesting! Soybean prices have so far risen 37 times (an average of 11.5¢/bu.) the day after a USDA Quarterly Grain Stocks Report during that period. Soybean prices have dropped 43 times (an average of 11.7¢/bu.) and have remained unchanged only once. About one week after the reports, soybean prices have so far risen 37 times (an average of 16.4¢/bu.), fallen 42 times (an average of 21.1¢/bu.) and have been unchanged twice. From 1984 to 2003, corn prices rose 36 times (an average of 5.5¢/bu.), fell 37 times (an average of 4.7¢/bu.), and were unchanged 8 times on the day following the USDA Quarterly Grain Stocks Report. A week after those reports, corn prices have risen 39 times (an average of 8.8¢/bu.), fallen 35 times (an average of 8.6¢/bu.), and been unchanged seven times.

Editors note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.