First Glance at USDA Planting Forecast

 

 

USDA offered up its first glance at spring planting forecasts at its outlook forum on Thursday and Friday.

USDA projects soybean acres will grow to 88 million acres planted this spring, up 4.6 million acres from last year, while corn planting will be 90 million acres, down 4.0 million from last year.

John Payne of Daniels Ag Marketing says both corn and bean acreage numbers took him by surprise…

“You know, for beans, I thought they were a little aggressive, and my game plan was more for what they did last year, leaving them down a little bit.  They didn’t do that, moved them up to 88 million, which is 5% higher than last year, which is something the market is going to take notice of. 

On the corn side, 90 million, 90 million acres, I don’t know if that’s going to cut the mustard, that’s 4 million less than a year ago, a  little bit higher than where we were in 2015, but demand has really come up since 2015, given the low prices we’ve had.  So, if you start penciling out 90 million using trend yields, you’re essentially meeting demand, or even falling a little bit short relative to where the demand has been of late.  So, you could actually see the carryout fall on a trend yield of 169.”

Payne says corn is set to take off with a smaller carry-out…

“Get your calculators out and do a quick trend yield or do a quick yield/supply analysis, if we have a 165, or even a 160, and I think this thing is set to pop.  So, for me I’m bullish corn off these kind of numbers, I don’t’ think on the short-term we’re going to see a lot of upside, and maybe a little bit of down side, as we see these deliveries met through Chicago.  But, I think longer term here, if we have a production problem, this thing could do the same thing we saw last year where it needs to pop to shut off demand, in the short term.”  

The shorter wheat acreage number falling 8.3 percent to 46-million acres was expected, but the Kansas City wheat market has been impressive as of late…

“Yeah, 20% less than two years ago.  So, 2015 we did 55 million acres, this year we’re going to do 46, a lot of that is spring wheat.  Personally, I think the winter wheat crop is going to be somewhere around 30 by the time it’s all said and done. Maybe 31.  You know, we still need a trend yield, we’ll probably meet demand, given where we are.

What we need to happen for the wheat market to move is the foreign markets to move.  We need a problem in the Ukraine, and out of the Black Sea region, because the Black Sea is eating up all our demand.  We used to be the provider to the Middle East, but the Black Sea has taken that over, especially since 2013, and that doesn’t appear to be coming back to us, even with some price appreciation, so we need to kind of develop some new markets. 

And I think, right now a weaker dollar would do that, we’re not seeing that yet, and lower wheat prices have done that, and we’ve seen demand coming a little bit more.  But, it’s about production, in my opinion, and last year we did a record yield on all wheat, by 57, if wheat was 37 this year, and I’m not saying it’s going to happen,  you’re talking about wheat production being at its lowest in some time, I mean hundreds of years.”

John Payne of Daniels Ag Marketing.


A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.

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