Market Analysis

The USDA continued its knack for providing surprises when the latest US planting survey showed less corn and more soybean plantings than the trade was expect-ing. Interestingly, the 89.996 million corn plantings were virtually the same as the Ag Outlook’s February level and 973,000 less than trade’s average guess. Correspond-ingly, soybeans latest plantings were 1.27 million higher at 89.49 million than expected and 6 million acres higher than 2016. Not surprisingly, these two planting levels prompted corn and bean prices to move in opposite di-rection after Friday’s report. This past year’s low prices also slashed sorghum by 933,000 acres to 5.76 million, which was 651,000 lower than expected. The highest percent jump in 2017 seedings occurred in cotton. Tex-as’s 1.35 million increase and the Mid-South & the SE adding area brought 2017’s total plantings to 12.233 mil-lion, the highest level since 2012.

The USDA’s quarterly stocks report revealed slightly higher March 1 stocks than the trade’s average levels in the three major crops. In corn, a 8.62 billion supply was posted, which was 82 million higher than trade average, but the smallest difference since 2010 except for last year. This stock level projects the corn’s winter feed/ residual demand at 1.52 billion bu., up 6% from last year. Some are calling for a lower feed forecast, but the USDA just dropped its forecast by 50 million bu. last month.

Soybeans March 1 stock of 1.735 billion bu. were also 51 million bu. higher than trade’s average estimate and the 3^rd highest difference since 2008, This suggests a possible underestimate of the crop may exist, but a slight decline (-18 million bu.) in beans quarterly residual after a strong export push last fall (similar to 2012 to 2014 fall periods) seems appropriate for this quarter. Wheat’s stocks were also 28 million higher, but wheat’s seasonal usage level suggests feed demand remains on target.

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What’s Ahead

US beef, pork and poultry outputs are higher than 2016. 1st half 2016/17 corn and bean de-mands are at record levels. However, the market’s focus remains on S. America’s crop output and 2017’s po-tential for sizable US crops if above average growing season occurs. Any supply hiccup across the N. Hemi-sphere will quickly change our carryovers. Have quarterly feed needs covered & sellers should hold sales.