Given the weather uncertainty associated with the spring planting season, post-plant price volatility is likely to increase. March 28 USDA Grain Inventory and Future Planting Report. Historically published prices have the potential for large (and unpredictable) price swings, and this year we saw further surprises with bullish numbers for corn and generally neutral numbers for soybeans.
Grain inventory reports are released only four times a year: January, March, June, and September. The March report not only provides a reference point for transaction forecasts, but also allows for comparisons of usage trends within countries. crop year.
The USDA projected corn acreage in 2024 to be 91 million acres, or 3.8% below the 2023 total of 94.6 million acres, the USDA said at the Agriculture Outlook Forum. For soybeans, the USDA estimates 2024 planted acres at 87.5 million acres, an increase of 4.7% from the previous year.
Corn: Stock prices remain flat
Starting with corn, USDA pegged March 1 inventories at 8.347 billion bushels, nearly 100 million bushels below the average trade estimate of 8.445 bushels. Initial thinking was that higher-than-expected feed/residue use during the winter season was partially related to disappointing soybean meal use.
Looking forward, USDA may elect to increase its 2023/24 feed/residual use estimates by 100-125 million bushels in its April 11 supply and demand report. All else being equal, the ending inventory forecast could decrease by a similar amount to 2.050 or 2.075 bbu.
The Planned Acreage Report pegs 2024 acreage at 90 million, which is nearly 1.8 million below the trading average forecast of 91.8 and at the lower end of the trading range of 90.0 to 93.8. However, it is important to note that using the USDA Outlook Forum trend yield of 181 bushels per acre, production would be 14.881 bbu. Even after incorporating the opening inventory reduction mentioned above and utilizing Outlook Forum’s usage estimates, the ending inventory in 2024/25 will still be around 2.275 bbu.
Soybeans: Find year-end stocks
Turning to beans, the grain inventory report pegs March 1 inventories at 1.845 bbu, just 10 mbu above the average trading estimate of 1.835 bbu. Last week’s report confirmed that the current predicted crop size for 2023 of 4.165 bbu is accurate. However, two more inventory reports will be released at the end of June and September, which will shed more light on the final production forecast.
Turning to the Planned Planting Report, the USDA estimates 2024 bean acreage at 86.5 million acres. This was 2.9 million acres higher than last year, but in line with average transaction expectations. Using Ag Outlook Forum’s USDA trend yield of 52.0 bpa, production in 2024 would be 4.452 bbu. Incorporating USDA’s current 2023/24 ending inventory forecast of 0.315 bbu and adding a small number of imports, the total supply for 2024/25 is 4.782 bbu.
Usage in 2024/25 from the Ag Outlook Forum was 4,400 bbu. Based on these assumptions, the ending stock for 2024/25 would increase to 0.382 bbu, which would be an increase of over 21% from this year..
corn running with the bull
There was a bullish reaction in corn following this report, but prices in beans were almost unchanged.
Price volatility is likely to increase given the weather uncertainty associated with the spring planting season. It remains important to maintain close contact with your advisor and implement risk management strategies to protect your balance sheet.
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