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Planting Intentions and Grain Stocks: Will the Market Notice?

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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USDA will release its annual Planting Intentions and quarterly Grain Stocks reports at 11 a.m. CDT Tuesday, March 31. (Logo courtesy of USDA)

While much of the U.S. is staying close to home and coronavirus deaths rise with every tick of the clock, USDA pushes forward with its annual springtime rituals. Prospective Plantings, a survey of farmers' intentions, and March 1 Grain Stocks are set to be released at 11 a.m. CDT Tuesday, March 31. Given the severity of 2020's outside market concerns, it is difficult to know if traders will even notice Tuesday's numbers.

PLANTING INTENTIONS

In typical years, USDA's March planting intentions survey is interesting, but has little real use. This year, the report could have been cancelled and I'm not sure anyone would have noticed.

I say that partly because we can all relate to good intentions falling short of reality. The same is true for planting intentions. A good example is how last year's soybean planting intentions of 84.6 million acres got knocked down to 76.1 million actual acres, cut by excess rain that persisted into mid-June.

It is also important to understand that, in 2019, a total of 14.9 million acres of corn, soybean and wheat plantings were lost to adverse weather. Just how much of that loss returns will be an important issue in 2020, but will not be addressed in Tuesday's report.

As of March 19, USDA's Spring Flood Outlook map showed widespread areas of moderate flood risk throughout much of the Corn Belt -- an important factor to keep in mind when considering this year's planting possibilities.

With the above comments in mind, Dow Jones' survey of analysts expects USDA's survey to show 94.3 million corn acres, up from 89.7 million in 2019. This would have bearish implications for prices if proved true. Soybean acres are expected at 84.7 million, up from 76.1 million a year ago and would support a neutral outlook for soybean prices in 2020-21.

Analysts' estimate of 44.9 million all-wheat acres is down slightly from last year's 45.2 million acres and has no significant price implications. The 30.8 million acres of winter wheat expected is down from 31.2 million acres a year ago. The 12.6 million acres of spring wheat is down slightly from 12.7 million acres in 2019. Durum wheat acres are expected at 1.5 million, up from 1.3 million acres last year.

MARCH 1 GRAIN STOCKS

In USDA's previous two quarterly Grain Stocks reports, corn totals were below analysts' expectations. That may happen again Tuesday as the market tries to work through a lower-quality corn supply from the 2019 harvest. Keep in mind, there is also unharvested corn still in fields and USDA promised a new production survey for Northern states sometime in early spring.

Dow Jones' survey expects USDA to find 8.162 billion bushels (bb) of corn on hand as of March 1, down from 8.613 bb a year ago. If true, that would mean corn use totaled 7.800 bb in the first half of 2019-20, the fourth-highest total on record. Feed demand should be up this season, but exports have started sharply lower than a year ago.

Saudi Arabia's March 7 decision to increase oil production won't affect Tuesday's corn stocks, but the new bearish outlook for ethanol demand will likely offset any potential bullishness Tuesday's report might offer.

For soybeans, Dow Jones' survey expects 2.237 bb on hand March 1, down from 2.727 bb a year ago. If true, 2.245 bb of soybeans were used in the first half of 2019-20, the sixth highest on record and still limited by the trade dispute with China before the phase-one agreement was signed Jan. 15.

Dow Jones' survey expects USDA to find 1.437 bb of wheat stocks on hand as of March 1, down from 1.593 bb a year ago. If correct, that means wheat use totaled 1.668 bb in the first three quarters of 2019-20, the second highest in six years, but nothing to brag about.

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Join us for a post-report webinar at noon, CDT on Tuesday, March 31. In addition, DTN's Senior Ag Meteorologist Bryce Anderson will offer comments about spring planting weather and Livestock Analyst ShayLe Stewart will explain how coronavirus has affected livestock markets. Register now at: https://dtn.webex.com/…

QUARTERLY STOCKS (million bushels)
3/1/20 Avg High Low 12/1/19 3/1/19
Corn 8,162 8,492 7,892 11,389 8,613
Soybeans 2,237 2,701 2,075 3,252 2,727
Wheat 1,437 1,572 1,385 1,834 1,593
PROSPECTIVE PLANTINGS
ACREAGE (million acres) USDA USDA
3/31/19 Avg High Low 2018-19 3/29/19
Corn 94.3 96.4 92.5 89.7 92.8
Soybeans 84.7 87.0 82.7 76.1 84.6
Cotton 13.8
Grain Sorghum 5.1
All Wheat 44.9 46.0 42.3 45.2 45.8
Winter 30.8 31.7 30.1 31.2 31.5
Spring 12.6 13.4 12.0 12.7 12.8
Durum 1.5 2.4 1.1 1.3 1.4

Todd Hultman can be reached at todd.hultman@dtn.com

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(AG/BE)

Todd Hultman