Reports pressure the market
Wheat markets buckled last week as another bearish USDA report added to the already overwhelming bearish attitudes in the wheat complex. The stocks and plantings report were expected to slant negative, and USDA did not disappoint.
Total wheat acres are projected to be 53.8 million acres, down 5.3 million from last year but still 500,000 above trade expectations. Spring wheat is expected to be 13.9 million acres, up 630,000 from last year and 500,000 more than projected. Montana will see the largest jump in spring wheat acres of 400,000 from last year to 2.8 million acres. North Dakota is forecast to increase their spring wheat plantings 250,000 from last year to 6.7 million acres.
Durum was actually lower than expected at 2.22 million acres, down 330,000 from last year and the projections. North Dakota will plant 1.5 million acres, down 150,000 from last year; and Montana will plant 500,000 acres, down 70,000 from last year.
Winter wheat also had some adjustments. USDA raised winter wheat acreage 380,000 from their January estimate, with 200,000 of that increase coming from Texas and the rest split between Nebraska, Montana and Colorado. With the wet, late harvest in eastern Kansas last fall, Kansas winter wheat plantings are down 700,000 from last year; most of those acres are expected to be planted into corn and soybeans.
White winter wheat was also adjusted upward slightly, with Washington seeing a 50,000 acre increase and Oregon a 30,000 acre increase.
Corn plantings were projected to be 88.8 million acres, up 2.3 million from last year, but down 300,000 from expectations. Most of the increase in corn plantings will be in Illinois, Kansas and Ohio. Iowa is expected to see a 200,000 decline in corn plantings, but will still remain the number one corn state.
Soybean plantings will be about 78.1 million acres, up about 600,000 from last year but down 400,000 from trade estimates. Most of the increases in soy plantings will be seen in Iowa, Kansas, Illinois and North Dakota. Iowa will also still remain the number one soybean state.
The quarterly stocks as of March 1 also cast more negativity to price action for corn and soybeans. Wheat was spared as USDA estimates were right in line with expectations at 1.35 billion bushels, but corn was estimated at 7.7 billion, up 190 million from estimates and soybeans were 70 million higher than estimates at 1.27 billion bushels.
So the negative attitudes were spread across the grain complex and no one dared step up to support the market, even though the US dollar was also under pressure. As wheat broke into new lows, the selling gained momentum and never looked back. The market did see a small bounce back the day after the report, and the last day of the holiday-shortened week, but the damage was done with the solid close into new lows.
New crop conditions continue to look very good; itâ€™s hard to see production problems with Kansas ratings at 70% good/excellent. The rest of hard red country also looks very good for the most part. Soft red is a different story with much lower condition readings as the crop breaks dormancy. Many of those acres risk being torn out, especially if spring weather allows for early fieldwork and producers stay on schedule.