Helen Plant, senior analyst at the UK’s Agriculture and Horticulture Development Board (AHDB) market intelligence division, was talking to FeedNavigator following the publication of the projected plantings report from the US Department of Agriculture (USDA).
While the seeding indicated for US corn is at a five year low of 36.1Mha and drop of 1.5% year-on-year, the intentions are above market expectations, she said.
Indeed, the USDA raised its estimates on domestic corn from the amount forecast in its February 2015 outlook from 89.0 million acres to 89.2 million for that crop.
“Corn futures dropped on the latest USDA predictions for seeding coupled with the existing high stockpiles,” said Plant.
US farmers are again planning to plant a record area of soybeans, 1% above 2014’s record. However, the area estimate is below market expectations indicated in a pre-report poll by Reuters, she said.
“The market did not move for soy probably given the fact that soybean stockpiles are lower than 2012 levels and the supply and demand fundamentals are much less tight than the same period a year ago,” said the analyst.
Total export commitments for US soybeans, as of last month, outstripped last season’s record pace, reaching 47.8Mt on 5 March compared with 44.2Mt at the same point last year.
USDA’s planting intentions report also shows farmers plan to seed a greater amount of other feed grains from sorghum to barley to oats than in 2014.
“The US wheat planted area looks like it will be relatively unchanged from last year though,” said Plant.
But she cautions that the USDA survey was carried out between 27 February and 18 March and farmers’ intentions can change over the next couple of weeks depending on weather conditions.
“There is still a long way to go yet, there is a lot of uncertainty and we would expect continued price volatility,” said the grain market expert
On the global front, if all the expectations come off then another bumper crop is expected in South America, where there are also large grain stockpiles. “The harvest is underway in Argentina and Brazil and early indications are good. We will know more in 4 weeks’ time,” added Plant.