USDA's recent quarterly Grain Stocks and annual Prospective Plantings reports provide important perspective for corn and soybean markets, says Darrel Good, University of Illinois crop specialist.
At 1.381 billion bushels, the March 1 soybean-stocks estimate was about 35 million less than expected. It implies heavy soybean use and suggests that the 2004 crop was smaller than estimated. If that's correct, year-ending stocks will be smaller than USDA projected, but will likely exceed 350 million bushels. That is still be above the 200 million bushels generally considered adequate, Good notes.
But, add the smaller than expected March 1 inventory to the drought-reduced Brazilian crop and relatively strong U.S. exports, and soybean prices should see some support.
At 6.754 billion bushels, the March 1 corn stocks were about 30 million bushels larger than expected. Year-ending stocks could exceed USDA's projection of 2.055 billion bushels by at least 200 million bushels, and could be the largest in 17 years. That should keep some pressure on prices in the near term, says Good.
USDA's latest Prospective Plantings Report suggests that U.S. producers intend to plant 81.413 million acres of corn in 2005, only 483,000 more than in 2004.
Major corn-producing states that intend to reduce acreage include 200,000 acres (17 percent) in North Dakota and 250,000 (5 percent) in South Dakota. Acreage is scheduled to increase by 300,000 (10 percent) in Kansas. Modest increases are also planned in Illinois, Indiana and Iowa. Overall, corn-planting intentions are about 1 million acres below market expectations, says Good. Intentions for all feedgrains are about equal to last year's plantings.
Soybean producers said they plan to plant 73.91 million acres in 2005, about 1.3 million below last year's acreage. Small increases are planned in Iowa, Kansas, Kentucky and Ohio. In total, planting intentions are down 300,000 acres in western-growing areas, 400,000 in the eastern Corn Belt and about 530,000 in the south.
Overall, soybean and corn stocks would remain relatively high for another year, concludes Good.