Thursday's USDA Prospective Planning report surprised market watchers with estimates that suggest that both corn and soybean acres will fall from year-ago levels and below expectations, while wheat acres will increase. Almost a month ahead of the official Statistics Canada acreage estimates, we look at today's report as it applies to the early indications of North Dakota producers.
Of the crops selected, the largest increase in acres, both in terms of area and in terms of percent increase, is expected in spring wheat acres. Spring wheat acres are expected to rise by 1.05 million acres, or by 19.6% from 2017, to 6.4 million acres, which would be the highest acreage seen in three years and 14.7% higher than the five-year average.
As seen on the attached chart, modest percentage increases in seeded acres are also expected for acres seeded to canola and chickpeas. Canola acres are expected to increase by 3.8%, to 1.650 million acres, while chickpea acres are expected to increase by 7.3% to 47,000 acres.
Despite the continued expansion of soybeans on the Canadian Prairies, North Dakota acres are forecast to remain unchanged at last year's record 7.1 million acres. Today's report indicates that the country's soybean acres will fall by 1.3%, or 1.16 million acres overall, while DTN blogs posted earlier in the week suggest the current soybean/corn ratio could lead to expansion of soybean acres relative to corn acres.
As indicated in DTN Cash Grains Analyst Mary Kennedy's Market Matters Blog earlier in the week, corn is losing favor with producers in the northern States, with corn acres estimated to fall by 10.8% or 370,000 acres to 3.050 million acres. This is the lowest acres reported for the State in three years and among the largest of all year-over-year declines expected for 2018, which includes a 400,000-acre drop in Kansas and 550,000-acre drop in Minnesota.
The next largest loss in acres is seen in durum, given less attractive new-crop opportunities shown. Durum area is expected to fall by 20.6%, or 260,000 acres, to 1 million acres, which would be the lowest in four years and 8% below the previous 2013-2017 five-year average. The spread between DTN's National Durum Index and DTN's National Spring Wheat Index, as of March 28, was $.24 USD/bushel (durum trading over spring wheat), which is the narrowest spread seen in four years and compares to the five-year average of $.70/bu. The recent high was seen in March 2015 of $2.44/bu. The reduction in North Dakota's durum acres is expected to account for 86% of the total 303,000 acre year-over-year decline in the country's crop, with smaller reductions also expected in Montana and Arizona.
Of the smaller crops grown in the state, North Dakota farmers are expected to reduce flax acres by 30.6%, oats (1.7%), barley (23.1%), dry beans (12.1%), lentils (33.3%) and dry peas (15.3%), with year-over-year reductions in brackets.
Note: there won't be any Canada blog on March 30 because the markets are closed that day.
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Cliff Jamieson can be reached at firstname.lastname@example.org
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