The US Department of Agriculture (USDA) released information Tuesday [March 31] on grains in storage along with a forecast of prospective planting for crop acres for the coming production season in a series of reports.
In total, a “massive amount” of acres are projected to be planted in the coming season, said Todd Hubbs, clinical assistant professor in the department of agricultural and consumer economics at the University of Illinois during a farmdoc webinar. Intended acreage for principal crops was more than 319m acres, however, some of the expansion is a recovery of acres not planted last year following weather challenges.
In addition, the amount of corn in storage at this point in the year was smaller than anticipated, and brought a “bullish surprise” on usage, said Scott Irwin, Laurence J. Norton Chair of Agricultural Marketing, the University of Illinois.
The feed and residual for corn in the first half of the year was 3.689bn bushels. However, there is still some question as to what usage will be for the rest of the marketing year.
Soybean stocks were close to what was expected, he said.
However, all information on feed crop use and anticipated planting comes at a time of increased uncertainty stemming from the global COVID-19 outbreak, said Irwin.
“We’re in an extraordinary situation in the middle of the coronavirus pandemic that is the big 800lb gorilla in the room, overshadowing a lot of other market factors,” he said. “But we have to recognize that we’re in historically uncharted territory that introduces an unusually large amount of uncertainty into taking a look at the corn and soybean supply and demand fundamentals for the 2020/21 marketing year.”
Anticipated feed crop plantings
The area planted in corn in 2020 is estimated to reach 97m acres – an increase of 8% or 7.29m acres from 2019, the USDA said. State-by-state plantings are expected to be the same or larger in 38 of 48 states.
“This number is a real heartburn for those of us who follow the markets and want corn prices to be higher,” added Hubbs. The prediction for the area to be planted in corn was higher than expected.
“We’re up 7.3m acres from last year and 7.8m acres from 2018,” he said. “There’s a lot of corn being planted through the heart of the Corn Belt – if this number comes to fruition we’re talking about a really large supply.”
Soybean planted area is expected to increase 10% from last year reaching 83.5m acres, the department said. Up to 22 soybean planting states are anticipated to increase the acres planted.
However, the area projected to be planted in soybeans is down slightly from what was expected, said Hubbs. One anticipation is some acres could switch between the two feed crops.
“We basically had even acreage [between corn and soybeans] in 2018 and ever since the trade war started we saw this stampede to corn by farmers in the US and that’s continuing,” he said.
The total area to be planted in wheat in 2020 is predicted to be 44.7m acres, which is a drop of 1% from 2019, the department said. The acreage marks the smallest wheat planting since 1919 when records of wheat planted acres start.
Grain stocks highlights
Grains that remained in the field at the start of March from the previous growing season, but that were expected to be gathered were included in the grain stocks total, the USDA reported. This is standard practice for the National Agricultural Statistics Service (NASS), which generates the report, but there were more acres than usual that remained to be harvested at the time the information was collected.
On March 1, about 7.95bn bushels of corn were in storage – a decline of 8% from last year, the department said. The disappearance from December to February was up slightly from the same period the previous year.
Similarly, about 2.25bn bushels of soybeans remain in storage, which is a drop of 17% from 2019, the department said. However, the indicated disappearance of soybeans declined 1% from earlier periods.
The amount of wheat in storage fell 11% from the previous year, the department said. The disappearance from December through February was 428m bushels – an increase of 3% from the previous year.
March 1 stores of both barley and oats were smaller than those available at the same time last year, the USDA said. However only barley saw an increase in the pace of disappearance.
About 166m bushels of sorghum also were in storage at the start of the month, the amount declined by 14% from stores available in 2019, the department said. “The December 2019 - February 2020 indicated disappearance from all positions is 84.5m bushels, 28% above the same period last year.”