Planting crops and grain stocks were a topic of conversation in the markets this week. The USDA issued its Prospective Planting and Stocks Reports, with the biggest surprise coming from the planting numbers. Corn planting is estimated at 91.1 million acres, up less than one percent from a year ago. Mike Zuzolo is the President of Global Commodity Analytics in Atchison, Kansas. He says the trade was expecting more corn acres in the report.
“I think that’s right. Look at the news wire estimates. The lowest number we saw was down around 91 million acres. I don’t publish to the newswires anymore because the algo-traders use them to position themselves before the numbers come out. I send stuff out to the producers and investors that I work with. So, I was below 92 and having a really tough time going above 91.5.”
He says one reason farmers may be shying away from more corn acres is the quickly rising cost of inputs. However, corn wasn’t the only surprise in the planting report.
“What was surprising to me is how did the soybeans come in at 87.6 million planted, when the trade, including myself, were closer to 89 and 90 million. What happened was most of the other producers in other parts of the country, including the cotton producer, the sorghum producer, and the rice producer all ‘stayed in their lane’ this year and they kept planting what they normally produce. I think this brings with it a little more questioning, especially with that Deep South looking wetter than normal from the Tennessee River Valley down to Louisiana, so we’re going to have to keep an eye on that because soybean acres could grow, similar to the way corn acres could grow because the of the way the weather is shaping up.”
He says the Deep South weather picture looks wet, while the main corn and soybean areas, especially in the Plains States, are leaning toward a drier pattern.
Zuzolo was disappointed in USDA’s prediction of 46.4 million all-wheat acres, the fourth-lowest planted area since records began in 1919.
“I think the big thing we saw in the planting that I’ll wrap up with, and this is where we have a leader to the downside, and that is the wheat market. We wanted it to be the leader to the upside with the drought in the High Plains and Central Plains and in the hard red wheat belt specifically, driving prices higher and make corn that much more expensive, not allowing wheat to get into a feed category. But unfortunately, we are seeing the wheat-corn spread dip into the 50-60-cent per bushel range. Soft red wheat minus corn, that is feed category for wheat, that is the lowest since late 2017.”
Corn planting totaled 91.1 million acres, up less than one percent from a year ago. Soybeans are estimated at 87.6 million acres, up five percent. All wheat acres are 46.4 million, up five percent. The all-cotton planting projection for 2021 is 12 million acres, one percent lower than last year.
The Stocks Report showed corn stocks down three percent from last year, soybean stocks down 31 percent, and all wheat stocks were seven percent lower than 2020.
“I was glad that the soybeans came in a little bit higher and would rather have it that way, and the wheat a little bit higher than the corn. The corn came in at 67 million bushels, 37 million bushels light, versus the average trade guess. And so, that keeps your old crop corn well bid.”
Corn in all positions totaled 7.7 billion bushels, down three percent from last year. Soybeans stored in all positions were 1.56 billion bushels, 31 percent lower than last March. All wheat stored in positions totaled 1.31 billion bushels, seven percent lower than last year. Durum wheat stocks in all positions were 42.7 billion bushels, 17 percent lower than last year.
Again, that’s Mike Zuzolo of Global Commodity Analytics in Kansas.