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USDA Reports For 3-31-14

Written by: Kent Thiesse

On March 31, 2014, USDA released its “Prospective Plantings Report” and its “Quarterly Grain Stocks Report”.  These were very highly anticipated USDA Reports, due to the uncertainty in grain 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.

 

Following are the key items from the March 31st Reports :

 

Corn --- Indicated intended corn planting acres of 91.7 million acres for 2014, which is down 4

               percent 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

               percent from the 5.40 billion bushels on March 1, 2013,  and is slightly below grain trade

               estimates prior to the USDA Report.

Soybeans --- Indicated intended soybean planting acres of 81.5 million acres in 2014, which is up 6

                      percent 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.

Wheat --- Indicated intended total wheat plantings for 2014 of 55.8 million acres, which is down one

                 percent from 56.2 million acres in 2013, and is similar to the 55.7 million acres of wheat

                 planted in 2012.

                 The wheat stocks on March 1, 2014, were listed at 1.06 billion bushels, which is down 15

                 percent from the 1.23 billion bushels on March 1, 2013, but is close to the wheat inventory

                 expected by the grain trade.

Cotton --- Indicated intended cotton plantings of 11.1 million acres for 2014, which is up 7 percent

                  from 10.4 million acres in 2013. Some of the cotton acres in the South that were

                  converted to extra corn acres in recent years are being transferred back to cotton acres

                  for 2014.

 

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 percent 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 percent 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 percent 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 percent in each State. Nebraska is expected to have 600,000 more soybean acres in 2014 than 2013, or a 13 percent increase. Other projected increases in soybean acres for 2014 compared to 2013 are Indiana at 6 percent, South Dakota at 4 percent, and Illinois at 1 percent. North Dakota is estimated to have the largest increase in the U.S. in soybean acres from 2013 to 2014, with a 22 percent increase, representing 1 million additional acres. For 2014, North Dakota is expected to raise 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 31st 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 percent of the total corn stocks and 39 percent 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. 

 

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Note --- For additional information contact Kent Thiesse, Farm Management Analyst and

              Vice President, MinnStar Bank, Lake Crystal, MN.  (Phone --- (507) 381-7960); 

              E-mail --- kent.thiesse@minnstarbank.com)  Web Site --- http://www.minnstarbank.com/