On March 31, the USDA released its “Prospective Plantings Report”, as well as the “Quarterly Grain Stocks Report”. These were very highly anticipated USDA Reports, due to the uncertainty in grain prices in recent months with the potential for a significant increase in U.S. soybean acreage in 2017, and the likelihood of even larger increases in USDA estimated grain stocks in the coming year.
Typically, the March USDA Reports is very critical to farm operators and grain traders because the 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 from April until June, which is why the March 31st USDA is so important to the corn and soybean prices.
So what exactly is the expectation for corn and soybean acres for this coming growing season?
Corn - Anticipated 2017 corn planted acres of nearly 90 million acres for 2016, which is a decrease of 4 percent from the 94 million planted acres in 2016, but is still above the 88 million corn acres in 2015. The 2017 USDA corn acreage estimate was slightly below the average grain trade estimate of just under 91 million acres. The highest U.S. corn acreage recorded in the March 31 estimate was 97.2 million acres in both 2012 and 2013. The 2017 corn acreage is expected to decline in most major corn producing States. The total U.S. corn stocks on March 1, 2017, were listed at over 8.62 billion bushels, which is up about 10 percent, compared to the 7.8 billion bushels on March 1, 2016.
Soybeans - Record soybean planted acres of 89.5 million acres are anticipated in 2017, which is an increase of 7 percent from 83.4 million acres of soybeans in 2016, which was the previous record acreage. The USDA projection exceeded the average grain trade estimate by 1.3 million acres, and was above the highest grain trade estimate. The 2017 soybean acreage is expected to increase or remain steady in 27 of the 31 major soybean producing States, with twelve States expected to have record soybean acreage. Soybean stocks on March 1, 2017, were listed at 1.73 billion bushels, which up 13 percent from 1.53 billion bushels on March 1, 2016, and compares to under 1 billion bushels as recently as March 1, 2014.
Source: USDA planting and crop report & Google image
