Post USDA – March 31, 2020

  • Overall limited reaction to a report with some pretty drastic numbers 
  • Before this report the industry had already put an asterisk beside the acreage data in light of the global changes seen over the last month 


USDA Quarterly Stocks (in billion bushels)
  USDA March 1, 2020 Avg. Estimate Range USDA March 1, 2019 USDA Dec 1, 2019
Corn 7.953 8.125 7.825-8.492 8.613 11.389
Soybeans 2.253 2.241 2.075-2.701 2.727 3.252
Wheat 1.412 1.432 1.385-1.572 1.593 1.834
USDA Prospective Plantings (in million acres)
  March USDA Avg. Estimate Range USDA Ag Forum USDA 2019 Final
Corn 96.99 94.328 92.5-96.4 94.0 89.7
Soybeans 83.510 84.465 82.7-87.1 85.0 76.1
All Wheat 44.655 44.982 44.4-46.0 45.0 45.2
Winter Wheat 30.775 30.900 30.2-31.7 30.8 31.2

USDA Quarterly Stocks:

  • Overall much as expected
  • Largest variance came in the corn stocks coming in lower than expected – would be seen as positive but with the recent collapse of the ethanol market the corn trade will need more than a slight decrease in stocks to shake the market
  • Wheat and beans coming in right around average estimates and slightly lower than year ago levels

USDA Prospective Plantings:

  • The USDA, using data collected the first of March pegged the U.S. corn acres are almost 97 million – higher than even the range of estimates 
    • If corn had a) not taken a significant fall already this month due to the crude collapse or b) we had not come into this report already believing this number would be out of date this would have been a decimating acreage number to the corn market
    • However given the last month we closed only down 2 cents 
    • Now this acreage – if realized would pose a huge problem for the corn markets if there is no replacement for the loss of ethanol demand 
      • It is widely believed however this number will shrink through the planting season 
      • Even still we would need to see very significant reductions in acres to counter the loss of ethanol demand as we stand today 
  • Soybean acres numbers came in lower than expected at 83.5 million acres – however the bean story also must face the potential acreage swing
    • If the thought is true that given the poor corn prices the acres will swing away from corn – soybeans face the opposite reality of looking at picking up acres through the spring
  • Wheat – consistent with estimates, unless winter kill poses a problem not likely to change 

What to watch next:

  • Next Thursday – USDA report releasing monthly supply and demand numbers – will be the first to factor in these estimates
  • Coronavirus – how this will impact the global food chain and the ethanol industry 
  • Chinese demand – looking for continued purchases of North American goods
  • Weather – watching early planting in the U.S.