At the end of March USDA issues two reports, quarterly Grain Stocks and Prospective Plantings. The Grain Stocks report is a count of old crop remaining as of March 1. For corn and soybeans this represents remaining old crop supply after six months of usage. For wheat, with a May 31 ending to the marketing year, this represents old crop after nine months of usage. This report helps USDA fine tune their view of miscellaneous demand in the prior December – February period. The other report, annual Prospective Plantings, is a farmer survey of 71,800 producers conducted in the first two weeks of March. This is the second data-point on potential acreage of the year. Before this, USDA’s February AgForum conference held their own view. Today’s report suggested the top three crops would see -3.8 million plantings this year due to financial concerns. The top eight would see -4.9.
2023/24: Old crop left over as of March 1 was counted at 8.347 billion bushels. This was 80 million under the 8.427 trade estimate. There are no accompanying full balance sheet tables issued with this report. With generally good data on December – February corn for ethanol and export shipments this implies feed/residual of 1.614 billion. This is a firm second quarter miscellaneous demand at +12% year/year. The first quarter was strong as well at +8%. Considering USDA’s current whole-year September – August feed/residual view is +3% year/year we’ll see a moderately positive adjustment on the next monthly supply/demand on April 11. A likely 50 million bushel adjustment on the April WASDE may not change the general old crop story where USDA currently sees at 2.172 billion. We are now at 2.122.
2024/25: USDA’s first farmer survey of the year suggested 90.036 million for 2024 plantings. This was under the 91.776 trade estimate and also USDA’s prior 91.0 February conference view. This represents a sharp -4.6 million planting vs. last year. There will be further adjustments to this number at specific times through the coming year. The main question for corn is whether this new acreage estimate changes the very bearish new crop view? 90.036 planted, 82.167 harvested and a 181.9 trend yield implies 14.944 billion for production. That is -397 million from 2023. When including our beginning stock estimate, +762 from prior year, a total supply view of 17.096 billion is noted. That is +369 million from last year. That helps push stocks to 2.316 billion. This implies December corn prices just under $4.00. What about yield risk? Each year during planting and summer yield determination the market often wants to price in risk of some sort. Though we’ll have an aggressive planting this year, implying more corn acres and a light boost to trend yields, the summer weather forecast implies final yields may end lightly below trend. A 6% yield risk could help trim stocks down to 1.841 billion. That would allow December temporarily to $5.00 during the yield risk time.
2023/24: Old crop left over as of March 1 was counted at 1.845 billion bushels. This was 17 million over the 1.828 trade estimate. This will likely not result in any major changes to USDA’s current old crop ending stock view. At the end of the year, August 31, USDA suggests 315 million.
2024/25: Prospective Plantings suggested implied USDA’s first farmer survey of the year suggested 86.510 million for 2024 plantings. This was next to the 86.530 trade estimate and under USDA’s prior 87.5 February conference view. The increase would only be 2.9 from 2023.
86.510 planted, 85.403 harvested and 51.4 trend yield implies 4.392 billion for production. That is +227 million from 2023. When including our beginning stock estimate total supply view would run +282. That helps push stocks to 407 million. This implies November soybean prices just over $11.00. One standard deviation for yield changes, a likely starting point for summer risk, would suggest 5%. That would put yields at 361. This implies price at $11.50. We’ll need a larger risk than the current summer forecast to attain a hoped-for rebound to $12.50.
2023/24: Old crop stocks were counted at 1.087 billion bushels. This was 43 million over the 1.044 trade estimate. There is a volatile December – February feed/residual count which was the issue. A light increase in USDA’s view of ending stock, currently 673 million, is likely ahead on the April supply/demand report.
2024/25: Plantings of all classes of was estimated at 47.498 million. This was next to the 47.330 trade estimate. It was just over the 47.0 USDA suggested in February. USDA had already released their first winter wheat survey of the year back in January, 34.425 million. That was -2.3 from the prior year. A light revision lower was noted today by -290,000 from that. The trade had expected a decline from last year in other spring on this report, -309,000 to 10.906 million. USDA instead counted +135,000 from last year to 11.335 million. These acreage numbers don’t materially change the new crop view. Trend yields would add 172 million to total supply. Ending stocks would increase 86 million to 759. Given that US wheat prices are primarily determined by world competition we do not expect a significant change in pricing.