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Vol. 11, No. 57 / March 26, 2013
USDA will release a number of market moving reports on March 1 Grain Stocks, Analyst Estimates
Thursday. In recent years, the March “Grain Stocks’ report has Source: Reuters Analyst Survey
been particularly interesting as trade has had trouble accounting
for the pace of feed use during the Dec - Feb period. On average USDA Average Range of Estimates USDA USDA
analysts expect grain stocks as of March 1 to be 5.013 billion bush- Actual Estimate Dec. 1, 2012 Mar. 1, 2012
els. This implies a disappearance of about 3.070 billion bushels
for the quarter. Corn export demand during the quarter was like- Corn ? 5.013 4.885 - 5.248 8.030 6.023
ly quite dismal probably around 175 million bushels. Ethanol
production also was down significantly during the quarter, proba- Soybeans ? 0.935 0.905 - 0.984 1.966 1.374
bly around 13% or so. Considering the decline in both ethanol and
Wheat ? 1.177 1.055 - 1.238 1.660 1.199
export demand, the average trade estimate of ending stocks im-
plies that corn and residual during the Dec-Feb quarter probably
was around 1.47 billion bushels, about 4.6% below the same quar- March 1 Planting Intentions for 2013 Crops, Analyst Estimates
ter a year ago (we have a 53 million bu. corn import number fac- Source: Reuters Analyst Survey
tored in). The survey will confirm whether this expectation is
warranted. Feedlot inventories have been down about 6% from a USDA Average Range of Estimates USDA USDA
year ago during the past quarter. Also, the increased use of more Actual Estimate Feb. Outlook 2012 Planted
efficient feed additives has meant better conversion rates and
heavier animals. However, the number of broilers coming to mar-
Corn ? 97.252 95.7 - 98.5 96.500 97.155
ket in the last quarter was higher than a year ago while the num-
ber of hogs was about the same. The 6% decline in feedlot inven- Soybeans ? 78.394 77.0 - 79.7 77.500 77.198
tories likely is not enough to account for the 4.6% reduction in feed
use implied in the quarterly corn balance sheet. Some wheat feed- Wheat ? 56.442 55.6 - 57.3 56.000 55.736
ing certainly took place but again, there is plenty of uncertainty
coming into the report as higher than expected feeding rates imply
more rationing will be required in the next two quarters. ably as much as 20-25% of the hard-red winter wheat acres (29.1
million) will be abandoned. Soybean plantings also are expected
While the grain stocks survey will impact mostly old crop
to increase 1.5%. Combined corn, wheat and soybean acres this
corn and soybeans, the planting intentions survey affects deferred
spring are expected to be up about 2 million acres from a year ago.
grain futures and implicitly livestock and poultry production.
USDA indicated in the February outlook forum that it expects The ‘Prospective Plantings’ report will provide one of the
farmers to plant about 96.5 million acres with corn. Private ana- first indications as to the kind of corn supply and pricing that we
lysts, however, expect even more acres to go into production. should expect for the 2013-14 marketing year. In its February
Some areas of the country that normally are not big corn produc- outlook meetings, USDA used a trend yield of 163.5 million bush-
ers are expected to plant more corn and the marginal increases els for the upcoming year. With 97.3 million corn acres planted,
are expected to push total planted acres at near 97.3 million acres this kind of yield would cause corn production next fall to jump by
(average of analysts). If this number ends up being correct, it about 3.9 billion bushels (+36%). That kind of an increase could
would represent the largest number of corn acres planted since push corn prices well below $5 per bushel, and likely below $4 per
1936 but only slightly higher than the acres planted last year. As bushel. But it is a big if at this moment and a possibility that
last year showed, planting a lot of acres does not guarantee a rec- many in the market prefer not to bet on. But even a 10 bushel
ord crop but, if weather conditions permit, the big plantings departure from trend (153 bu. acre) would still yield a gain of al-
should help improve the corn balance sheet. As the lower table most 3 billion bushels (+27%). Some of the extra supply would
above shows, trade expects year over year planting increases in all likely quickly be absorbed by both ethanol and export markets.
three major crops. Wheat plantings, which includes both winter The latter is especially interested in more US corn. Still, that
wheat planted last fall and spring wheat to be planted this spring, kind of increase would most certainly push corn prices back in the
are expected to be up by 1.3% from a year ago. However, the ex- $5 per bushel territory. The only thing needed now is for some
pectation is that a significant number of winter wheat acres, prob- good growing weather to show up.
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