USDA’s Prospective Planting Report overshadowed by COVID-19
Tomorrow, the USDA will release its first farmer survey-based look at this spring’s planting intentions at 11:00 a.m. CT.
The general consensus is that U.S. farmers will plant significantly more corn and more soybeans vs. a year ago.
The trade expects the USDA to estimate 2020 corn planting acreage at 94.32 million, about what the USDA forecasted in its February Ag Outlook Forum, and way above the USDA’s final estimate of acreage in 2019 at 89.7 million.
For soybeans, the trade expects an acreage estimate tomorrow at 84.8 million vs. the USDA’s Ag Outlook estimate of 85.0 million and the USDA’s final estimate in 2019 at 76.1 million.
For wheat, the trade sees USDA pegging U.S. wheat acres at 44.9 million vs. 45.1 million in 2019.
In addition, the USDA will release updated estimates on U.S. Quarterly Grain Stocks.
The stocks estimates, as of March 1, are expected to be smaller, because of a smaller 2019 crop.
Al Kluis, Kluis Commodity Advisors, says that the trade will eye the stocks’ side of the report. “The USDA report may show larger corn and soybean inventories than the trade is expecting. This report has been a bearish surprise in four of the last five years,” Kluis told customers in a daily note.
More Acres Expected
Bryan Doherty, Total Farm Marketing by Stewart-Peterson, says that the USDA report is sure to show the additional acres following a wet planting season in 2019.
“Farmers will plant more corn, no doubt. And there will be more soybeans. Remember, last year’s crop was reduced because of the wet weather. But take everything with a grain of salt. Farmers were surveyed in the first part of March. So, these acreage numbers are a month old. And the world has changed abruptly in the last month,” Doherty says.
“If the virus remains prevalent, can you logistically move enough farm supplies around with a short labor force?” Doherty asks. “However, in the last week, producers have told me that they are not hitting the concern button yet.”
Leading into this report, it has not been the primary question from producers, the market adviser says. “It hasn’t been ‘what is the report going to say.’ There are too many other moving parts, marketing-wise. For instance, producers want to know if they can move their corn to an ethanol plant or ‘when are they going to take my corn,’” Doherty says.
Doherty added, “I would say the report is secondary to the health of the current market. And secondary to the mental health of the producers who are trying to figure out other things vs. guessing what the report is going to say.”
The March report does come at a time when farmers have this COVID-19 coronavirus shelter-in mind-set, Doherty says.
Planting Corn Later
Last year, some farmers did learn that late-planted corn was not the end of the world. Remember, the planting weather improved late in the season, plus the government’s market facilitation program (MFP) payment that required a plant-it-or-don’t-get-the-payment mentality. And thirdly, farmers felt like the fall crop insurance price would be higher than the February insurance average, therefore, they planted more, Doherty says.
“Our conversations with producers reveal that they were thankful that August didn’t get too hot to burn the crop, and there was a lengthy fall. But the late-planted corn brought with it some lower quality and quantity,” Doherty says. I don’t think farmers are feeling as though planting corn late is the wave of the future. Farmers don’t feel emboldened to plant anytime that they want. Remember, we didn’t have record yields, as a nation, last year.”