The U.S. Department of Agriculture’s March 1 Prospective Plantings Report was surprisingly bullish for corn and soybeans. United States farmers indicated they only intend to increase corn acres 1% from 2020 to an estimated 91.1 million acres (ma). That is only 325,000 acres higher than last year and was around 2.0 ma below the average trade guess.
Corn stocks in all positions on March 1, 2021 totaled 7.70 billion bushels (bb), down 3 % from March 1, 2020 or 251 million bushels. This was in line with expectations.
With the big corn acreage surprise, market analyst John Heinberg with Total Farm Marketing is optimistic about the upside in corn. “I think we need to be above $6.00 on old crop corn and above $5.00 on new crop.”
Soybean planted area for 2021 was also a bullish surprise, estimated at 87.6 million acres, up 5% from last year. However, this is nearly 2.4 ma below the average trade guess of 89.99 ma. It’s also below the estimate USDA released at the February Ag Outlook Forum. Heinberg says, “USDA’s 90-million-acre figure put soybean ending stocks right at 145 mb, so with the nearly 2.5 ma drop that could put new crop carryout down to as low as 100 mb which is below pipeline supplies.” This leaves no room for error during the upcoming growing season.
Quarterly stocks for soybeans on March 1, 2021 totaled 1.56 billion bushels, down 31% from March 1, 2020. However, this was in line with pre-report estimates. Heinberg says this equates to higher soybean prices. “The market needs to do more work to ration demand and so it is possible old crop soybeans may have to go as high as $16.00 to do that, which will also pull up new crop soybean prices.”
All wheat planted area for 2021 is estimated at 46.4 million acres, up 5% from 2020. The 2021 winter wheat planted area is up 9% from last year at 33.1 million acres. The area expected to be planted to other spring wheat for 2021 is estimated at 11.74 million acres, down 4% from 2020. Of this total, about 10.9 ma are Hard Red Spring wheat.
Quarterly stocks for wheat on March 1, 2021 totaled 1.31 bb, down 7% from 2020. On-farm stocks are estimated at 284 mb, down 16% from last March.
