USDA Report Predictions

The USDA are out at 13.30 London time this afternoon with their March 31st planting intentions and quarterly stocks data. Here's a list of what the trade is expecting:

Stocks Avg Guess Range Mar 1 2009
Beans 1.207 1.160-1.270 1.302
Corn 7.505 7.318-7.758 6.954
Wheat 1.364 1.332-1.398 1.040
Area (Mill Acres) 2009 Area
Beans 78.55 77.43-79.50 77.50
Corn 88.94 87.00-90.15 86.50
All Wheat 53.33 51.90-54.90 59.10
Winter Wheat 37.32 37.10-37.90 43.30
Spring Wheat 13.56 12.80-14.00 13.30
Durum 2.47 2.30-2.60 2.60

This report frequently throws up a surprise, last year soybean acreage came in more than 3 million below the average trade estimate.

It is worth noting that last season's report proved to ultimately be pretty accurate, and a lot closer than many estimates from the prominent private firms.

Whilst wheat is generally the least likely crop to spring a surprise in this report, as most of it is already planted anyway, I think that there may be some potential for a slightly bullish scenario this year.

Spring wheat acres are seen a little bit higher than twelve months ago at 13.56 million acres, partially compensating for some enforced winter wheat reductions in soggy states like Illinois.

With wheat hitting contract lows recently, and US material still uncompetitive in the global marketplace, it seems like there is potential for US wheat prices to work lower still. That may prompt some US growers to rethink their strategies this year.

With new crop soybeans still pushing USD10/bushel I think that we might see plenty of farmers decide to side with them, despite record production from South America. Continued buying from China and the likely reintroduction of the tax break on biodiesel should underpin US demand in the year ahead.

Despite the early season weather problems in 2009 (similar to this year), the ultimately great yields achieved for beans and corn should also encourage increased plantings of both. Corn growers will be optimistic that demand from the ethanol sector will remain robust, especially if the EPA increase the maximum inclusion rate in gasoline - as many expect - later in the year.

Certainly those are some of the thoughts that would be gowing through my mind if I were a US farmer right now.

I'd estimate corn and soybean area to come in towards the top end of analysts' estimates with wheat at the lower end. Beans 79 million, corn 90 million and wheat 52.5 million.