Swing size to soybeans surprises trade

MINNEAPOLIS — The highly anticipated prospective plantings report was as surprising as expected by the trade when it was released by the U.S. Department of Agriculture on March 31.

Brian Hoops, Midwest Market Solutions president, shared his insight into the planting intentions and quarterly grain stocks reports in a Minneapolis Grain Exchange-hosted teleconference.

The USDA’s farmer survey found corn prospective planted acres of 89.49 million acres and 90.955 million soybean acres. Were they in line with trade estimates leading up to the report?

“The 89.49 million corn acres were well below the average trade guess of 92 million and well below last year and below the ag outlook conference estimate. Soybean planted acres was above the trade estimate of 88.7 million.

“This could be the biggest soybean number and the smallest corn acreage number that we see, especially if the market rallies in the corn and drops a little bit in soybeans I believe it will change those acreage numbers around during the spring time frame to the extent that the availability of fertilizers will also make a determination about spring planting.

“It was a little bearish surprise for soybeans, but a bullish surprise for corn acres.

“We’re very likely to see highs made during the mid- to late-April 4 time frame for the corn market at least until we get into the heart of the growing season.”

USDA also released the grain stocks report for the second quarter of the marketing year. Were there any friendly numbers?

“Corn stocks were below the average trade guess by 27 million bushels. That was somewhat of a friendly number for the old crop, but we’ve seen a lot of spread trade because of the corn acreage numbers.

“Soybean stocks were above the trade guess. I believe this is the sixth consecutive year USDA has been above the trade guess for soybeans for this quarter.”

There has also been greater focus on the wheat market with Russia’s attack on Ukraine, a major player in global wheat trade.

“Wheat quarterly stocks came in at 1.025 billion bushels, 20 million below the average trade guess and well below last year’s. In fact, this wheat number was the most bullish wheat stocks in the last 13 years.

“We have a somewhat bullish stocks scenario for the U.S. The problem is we just don’t have enough demand for our wheat. The rally we saw over the Russian and Ukrainian news priced us out of the wheat market as far as being competitively priced and we’re struggling with that demand now. We just don’t have enough export business.

“It’s a tight stocks situation, but not an incredibly bullish one because we’re left without much in the way of demand.

“The outlook should be steady to higher for spring wheat belt and I think the winter wheat contracts will react to wheat coming out of dormancy which it is and we’re getting some moisture. We have cool temperatures right now and we need warmer temperatures to help that crop along.

“All-wheat planted acres did come in above levels of a year ago by about 600,000, but they are under the average trade guess.

“It was a little bearish surprise for soybeans, but a bullish surprise for corn acres.”

—  Brian Hoops, president, Midwest Market Solutions

“So, we had a good pop in the wheat market right after the report’s release off of these acreage numbers.

“This market should find good support. I would not be surprised to see wheat prices try and move higher during the spring planting time frame in an effort to buy a few more acres just to make sure we have enough acres to meet the demand for this year.”

Was there anything that stood out in the total grain planted estimates portion of the prospective plantings report?

“Total grain planted of 254.2 million acres is only up slightly from a year ago when it was 253.5 million acres seeded. There was some talk that we’d have CRP acres be taken out of idle and being planted. That has not been the case. I don’t think that will happen this year.

“If we can grow an average crop it should be enough to slowly start to rebuild some of our balance sheets.”