NASHVILLE, TENN. (RFD NEWS) — Farmers and traders are gearing up for a major week of data, with the U.S. Department of Agriculture (USDA) set to release its closely watched Prospective Plantings and Quarterly Grain Stocks reports. Analysts say the planting report is a critical early indicator of supply, though weather will ultimately determine production. Both USDA reports are scheduled for release at 12:00 PM EDT on Tuesday.
“There could be some surprises, and there usually is, but you know, the trade knows that it’s not what you plant, it’s what you grow during the season,” explains Brian Hoops with Midwest Market Solutions. “We have a long growing season ahead of us, but we really need to ensure that we have enough acres, corn, and soybeans to meet the demand that we expect to have. You know, we have record export demand, very strong ethanol usage, good feed demand, record overall demand for this corn market, and we have to have enough acres, can’t back off too many acres from last year, but yet we have high fertilizer prices, high fuel prices that make it a challenge for the farmer to plant all those acres.”
Private estimates from Allendale suggest corn acreage could drop by 5 million acres, while soybean acreage may increase by about 4.5 million acres. Production estimates show corn down slightly from previous government projections, while soybeans could come in higher. Weather is also a key concern heading into planting season, especially in parts of the Corn Belt experiencing dry conditions.
“We’ve been dealing with such dry conditions, and particularly from eastern Texas all the way up the Ohio Valley,” explains analyst Sam Hudson with Cornbelt Marketing. “And the rains this week, I think, are gonna go a long way in terms of prepping our soil moisture and seed beds for planting. You look at a lot of these early soybean plant dates. We’re going to start to pass — starting April 5, April 10, April 15 — and some farmers will look to go even ahead of that if they have the right conditions. It looks like temperatures are definitely gonna warm. I think the question is, how much more moisture do we get? And what does our profile look like as we go into the summer months when that heat really starts to come back into frame?”
Some traders warn that the ongoing drought in the western Corn Belt and Southern Plains could complicate acreage decisions.
“The fringe acres really carried a lot of the national corn yield last year,” says Brady Huck with Empower Ag Trading. “And you know, if you’re going to plant a big acreage again, you’ve got to have the weather to support. And we had great conditions, not perfect, not everywhere, but largely good conditions out there. And we’ve got a real issue with drought out here in the western Corn Belt, the Southern Plains. Keep an eye on drought. We need something to change out here.”
Meanwhile, trade tensions are adding another layer of uncertainty. China has launched its own investigation into the U.S., accusing it of disrupting supply chains, as both countries prepare for a rescheduled meeting between Donald Trump and Xi Jinping in mid-May.
Rabobank economist Stephen Nicholson says long-term price volatility has increased significantly in recent years.
“From 1900 until today, looking at the annual average farm gate price that USDA publishes and puts on the S&Ds, you can see very clearly over time we move from different plateaus of prices,” Nicholson says. “And typically, until 2008, those plateaus or trading ranges were about a buck, at most a buck and a half. And then in 2008, that all exploded, and that range now is really kind of $4. It’s kind of like $4 to $8. You can argue $3.50 to $8.”
Nicholson told AgInfo.net that the United States and Brazil are the leaders in crop production exports, which is why there has been so much volatility in recent months.
