With the growing season off to a slow start due to cold weather and an overabundance of moisture through many of the U.S.’s major cropping regions, USDA is cranking up its data machine. In the past couple of weeks it has issued its Prospective Planting and first Crop Progress reports, as well as its monthly World Agricultural Supply and Demand Estimates (WASDE).
The Prospective Plantings report got the most attention as corn acres came in above market expectations, soybeans came in lower than market expectations and wheat acres are projected below industry consensus. In addition, grain stocks are estimated to be higher than what the industry expected.
More acres than anticipated will be switched to corn, according to the Prospective Plantings report. USDA expects corn acreage to total 92.8 million acres in 2019, up 4% year-over-year and 2% above consensus of 91.2 million acres. Growth in corn acreage appears to be coming from switching from soybean acreage as soybean acres are expected at 84.6 million, down 5% year-over-year and 2% below the consensus of 86.2 million acres. At the same time, acres planted to wheat is forecast by USDA to be 45.8 million acres compared to industry outlook of 46.9 million, down 4% from 47.8 million last year.
Soybean stocks, as expected, are estimated to be at record levels (2.72 billion bushels vs. consensus 2.73 billion). According to the most recent WASDE report, he season-average soybean price range forecast of $8.10-$9.10 per bushel was unchanged at the midpoint.
Corn stocks were reported to be higher than the industry anticipated (8.61 billion bushels vs. 8.31 billion). The season-average corn price received by producers is lowered 5 cents at the midpoint to $3.55 per bushel. Estimated wheat stocks are 1.592 billion bushels vs. industry estimates of 1.55 billion. The season-average farm price range is unchanged at the midpoint of $5.15 per bushel and the range is narrowed to $5.10-$5.20.
In a note to investors, Stanley Elliott, machinery analyst for Stifel, said, “Corn prices reacted negatively to the news while soybeans were roughly flat as corn grain stocks were higher than expectations and there was higher than expected switching to corn acreage (from soybeans).
“Additionally, the USDA published its first weekly Crop Progress report for 2019. The first Crop Progress report of the year generally lacks significant detail (too early in the season). However, this report indicates higher-than-normal moisture conditions amid flooding throughout the Midwest, which could be an early sign of higher-than-normal prevented acreage plantings later this year.”
Currently, USDA is reporting that topsoil, surplus moisture levels are the highest in 5 years at 34% vs. 21% last year. Subsoil moisture levels are also the highest in 5 years at 30% compared to 14% last year.