USDA Report Analysis and The 2 Week Weather Outlook
April 2nd, 2019
The USDA surprised the market Friday with a jump in projected corn acres and a decrease in soybean acres in 2019. Prospective plantings found that U.S. farmers plan to plant 92.792 million corn acres, +1.5 million acres more than the trade had forecast. The USDA reported 84.617 million soybean acres are expected in 2019, a -1.583 million acre decrease from trade estimates. Corn stocks in all positions came in at 8.605 billion bushels which was 288 million bushels more than the trade had anticipated but -290 million bushels less than this same time a year ago. Soybean and wheat stocks numbers came in where the trade had expected.
Avg. Trade USDA USDA 2019
Mar # Trade Est. Range 2018 Outlook
Corn: 92.792 91.332 89.5 - 92.7 89.129 92.0
Soybean: 84.617 86.169 84.263 - 88.0 89.196 85.0
All Wheat: 45.754 46.915 45.9 - 48.0 47.8 47.0
Winter Wheat: 31.504 31.460 31.0 - 32.5 32.535 NA
Other Spring: 12.830 13.419 12.6 - 13.9 13.2 NA
Durum: 1.420 2.081 1.610 - 3.0 2.065 NA
Cotton: 13.8 14.498 14.1 - 15.4 14.099 14.3
Sorghum: 5.14 5.777 5.4 - 6.5 5.690 NA
March 1 Grain Stocks
Avg. Trade USDA USDA
Mar # Trade Est. Range Mar 1, 2018 Dec 1, 2018
Corn: 8.605 8.335 7.620 - 8.800 8.892 11.952
Soybean: 2.716 2.683 2.095 - 2.797 2.109 3.736
Wheat: 1.591 1.555 1.435 - 1.617 1.495 1.999
Bloomberg/USDA is also reporting that the total principal crop acreage is projected to fall by -4.266 million acres from 2018. The change from 2018 to 2019 acreage by crop is shown in the graph below.
Traders as well as producers are still scratching their heads regarding the corn acreage estimate announced last week. Not only are they projecting additional corn acres with rising input prices and lower crop prices, producers across the country are facing tighter cash-flows than they have seen in years. The specifics of the increase in corn acres also has the trade confused with the biggest increase in corn acres projected to stem from the upper Midwest region. They have North Dakota projected to raise an all-time record number of corn acres with an additional +900,000 acre increase from 2018. South Dakota +700,000; Iowa +400,000; Wisconsin +150,000; Nebraska and Minnesota are both expected to plant an additional 100,000 acres this season. Keep in mind that according to satellite data from Reuters gathered last Friday (March 29th), there is no less than 1 million acres of U.S. cropland currently under water. At that time Iowa was estimated to have 474,000 cropland acres submerged along with an additional 200,000 in Missouri. The governors from the states of Nebraska, Iowa and Missouri were scheduled to meet today to discuss the known damages caused by the extensive flooding and steps that can be taken by the Army Corp of Engineers to manage the Missouri River more effectively in the future.
The -5% reduction in total planted soybean acres came as a surprise to traders, while the quarterly stocks estimate of 2.716 billion bushels was mostly in line with expectations. Remember though, while the stocks number did not increase our current soybean stocks are up 28% from a year ago. Bottom line we need a trade deal with China very soon and a wide-spread, major, U.S. weather story to give soybean prices a helping hand. Unfortunately there is a high probability that planted soybean acres could move higher in the upcoming weeks.
Politico reported that the Director of the National Economic Council, Larry Kudlow says negotiations with China may not be over as quickly as everyone thought. During his speech at the Export-Import Bank’s annual conference he told the group that be believes we will get a deal worked out and when it happens it will be historic. He was uncertain about the exact timeframe hinting that it may take a few more months for a deal to be finalized. Chinese officials are still hoping for an agreement by the end of April.
Last year during the first two weeks of April the U.S. was colder and wetter than normal…Not This Year! This week, April 1-7 a significant nationwide spring surge of warm weather will finally arrive. WeatherTrends 360 expects the warm temps to spread into the following week encompassing most of the country.
The long-range outlook from NOAA shows a similar forecast for the first half of April. Looks to be a warm and wet start to planting season.