USDA prospective planting report has corn acres up in 2012

By Matt Reese

USDA’s planting intentions report has corn up 4% from 2011

USDA expects a large acreage for corn in 2012 in the Prospective Plantings report that had traders scrambling prior to its release.

“The long awaited USDA planting intentions report and grain stock report has finally been released. In the days preceding the report, corn fell off 52 cents,” said Doug Tenney, with Leist Mercantile in Pickaway County.”Traders have been extremely nervous as they have been liquidating positions in an attempt to reduce risk heading into the March 30 reports.”

So far, the markets appear to be responding.

“Calls are all over the spectrum heading into the 10:30 opening,” Tenney said. “Corn is called 5-10 cents higher, other calls have corn 20-30 cents higher.

Soybeans are called 30-40 cents higher.”

Driven by favorable prices, U.S. farmers intend to plant 95.9 million acres of corn in 2012, up 4% from 2011, according to the report released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS). If realized, this will be the largest corn acreage in the United States since 1937, when producers planted 97.2 million acres of corn.

Producers across many of the Corn Belt states are expected to set new record highs in 2012. Farmers in Iowa, the top U.S. corn-growing state, intend to set a new record for the state by planting 14.6 million acres, up 4% from 2011. Growers in Idaho, Minnesota, North Dakota and South Dakota also intend to plant record-high acreages. The largest year-over-year increase is expected in North Dakota, where farmers are recovering from last year’s floods and declared their intentions to plant 3.4 million acres of corn, up 52% from last year.

The corn acreage increase, coupled with weather conditions in the Southern Plains resulted in a soybean acreage decrease. U.S. soybean growers intend to plant 73.9 million acres in 2012, down 1% from last year. Affected by the drought conditions that have continued from last year into early March, Texas and Oklahoma farmers plan significant reductions in soybean acreage, expecting to dedicate 24% and 15% fewer acres respectively to the crop this year. These decreases are offset by acreage increase in other states, such as New York and North Dakota, where farmers are expected to set new records. Also affected by difficult weather conditions, U.S. cotton growers expect to plant fewer acres in 2012.

While anticipated corn acres are up, corn stocks are down 8% from March 1, 2011. Corn stocks total 6.01 billion bushels. Of the total stocks, 3.19 billion bushels are stored on farms, down 6% from a year earlier. Off-farm stocks, at 2.82 billion bushels, are down 10% from a year ago. The Dec. 2011 to Feb. 2012 indicated disappearance is 3.64 billion bushels, compared with 3.53 billion bushels during the same period last year.

Soybeans stored in all positions on March 1, 2012 totaled 1.37 billion bushels, up 10% from March 1, 2011. Soybean stocks stored on farms are estimated at 555 million bushels, up 10% from a year ago. Off-farm stocks, at 817 million bushels, are up 10% from last March. Indicated disappearance for the Dec. 2011 to Feb. 2012 quarter totaled 998 million bushels, down 3% from the same period a year earlier.

“The corn number is above the high end of trader expectations while soybean acres were below the low end of trade expectations. It is already being suggested the corn acres number could be the high number for the year. The soybean number could be the low acres number for the year,” Tenney said. “Bottom line, the stocks number for corn is bullish while the acres report for corn is bearish. Numerous thoughts have suggested this could be the reality of all of the report numbers.”

The Prospective Planting report, in combination with the grain stocks report on the same day have a history of creating wild market changes, Tenney said.

“The quarterly USDA grain stocks report is quickly capturing the attention of traders as an extremely volatile report,” he said. “Past corn reports yielded the following results at the report day close: January 2012, corn was down the 40-cent limit; September 2011, corn was down the 40-cent limit; June 2011, corn was down the 30-cent limit: March 2011, corn was up the 30-cent limit; January 2011, corn was up 24 cents, but it traded up the 30-cent limit; September 2010, corn was down 9.25 cents. It was then down the 30-cent limit the following day. June 2010, corn was up 29.5 cents and traded up the 30-cent limit.”

 Mike Zuzolo from Global Commodity Analytics also weighed in on Friday’s report. Listen to his comments.

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