Prospective Planting and Grain Stocks Reports – A Summary

by: Brian Williams and John Michael Riley

Monday’s numbers from USDA National Agricultural Statistics Service’s Prospective Plantings report and Grain Stocks report came in near expectations. The Prospective Plantings report uses surveys of producers from February 27 through March 18 to estimate the upcoming acreage allocation.

For 2014, U.S. corn acres are estimated to be 91.691 million acres, 1.057 to 1.323 million acres less than the average of pre-report guesses — depending on which news report you read — but within the range of estimates. This number is about 4% lower than last year’s 95.365 million acres and the lowest corn acreage since 2010. Mississippi producers are expected to plant 580,000 acres to corn this year, 33% less than last year’s 860,000 acres. From the quarterly stocks report, U.S. corn stocks were estimated at 7.006 billion bushels, which is 30% higher than a year ago but very close to pre-report expectations. Corn futures were up sharply on the day with prices rising ten cents and closing above $5.00 for the first time since late August (the December 2014 contract finished just under $5 at $4.98 1/4). Even though the acreage projection was within range, consider that the difference from the reported value and expectation (conservatively say 1 million), when using a slightly lower than trend yield (155 bushels per acre), implies a 155 million bushel smaller 2014 crop than had been expected. That is 11% of the current ending stock number, so no small miss. Also consider that for the past seven years, USDA has typically underestimated corn acres, with three of the seven years missing the mark by one million or more acres (-3.073 in 2007, -1.396 in 2009, and -1.291 in 2012).

U.S. soybean acres are estimated to be 81.493 million acres, 331,000 to 436,000 more than the average pre-report expectations. This figure is 6% higher than last year’s acreage of 76.533 million acres and if realized, will be the highest acreage on record. Mississippi soybean acres are expected to be 7% higher this year at 2.150 million acres. U.S. soybean stocks came in slightly higher than expected at 992 million acres and are 1% lower than a year ago. Old crop soybean futures were up sharply on the day reflecting the still tight stocks number (also factoring in robust exports thus far in the marketing year), closing at their highest point since July, while new crop contracts were lower on the day given that acres came in just above expectations.

Wheat acres are projected down both in the U.S. and in Mississippi. Winter and spring U.S. wheat acres are estimated to be 55.815 million acres in 2014, less than the expected 56.277 million acres from pre-report estimates and also 1% lower than last year. Spring planted wheat is projected at 13.808 million compared to an expected 14.064. Mississippi wheat acres for 2014 are estimated at 230,000, 43% lower than the 400,000 acres planted in 2013. Wheat stocks were 15% lower than a year ago at 1.06 billion bushels, but came in near trade expectations. Wheat was largely unaffected by the two reports, closing up a penny on the day.

U.S. cotton acres are expected to be nearly 700,000 acres higher than a year ago at 11.101 million acres. The most recent acreage forecast for cotton called for 11.5 million acres, so the USDA projection was 399,000 under that. Mississippi is projected to see a 31% increase in cotton acres for 2014, with an estimated 380,000 acres planned to be planted this year versus 290,000 planted last year. Most states, outside of the Southeast (Alabama, Georgia, Florida, and South Carolina) and West (Arizona, California, and New Mexico) showed year-over-year increases, with Texas’ projection up 600,000 to 6.4 million, or 58% of U.S. acres.

Mississippi will also see a 36% increase in rice acreage projected at 170,000; a 32% increase in peanut acreage at 45,000; an 8% increase in sorghum acres at 70,000; and 15% increase in sweet potato acres at 23,000. Excluding hay but factoring in winter wheat, Mississippi will have 159,000 fewer planted acres in 2014 than in 2013. When considering only summer crops, including hay, Mississippi’s total acreage is expected to tally 3.418 million, 14,000 more than 2013. So, it appears that many of the 170,000 fewer wheat acres were idled this year and will likely result in fewer double-cropped acres between wheat and, typically, soybeans.

Rice Stocks totaled 88.954 million hundredweight, 15.315 fewer than March 1, 2013 ( -15%).