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Allendale Releases 2016 Acreage Survey



Allendale, Inc. estimates US grain and oilseed producers will increase corn and wheat acres, while lowering the number of acres sown to soybean. All three survey totals are higher than USDA’s Agricultural Outlook Forum estimates. 
Corn planting intentions of 90.431 million acres would be the sixth largest acreage of the past ten years. Allendale’s production estimate would imply a production increase of 31 million over last year’s record.
Soybean planting intentions are seen at 82.575 million acres, the third largest ever. Allendale’s production estimate would be 207 million under last year’s record level due to a return back from record 2015 yields.
Wheat acreage is estimated at 51.769 million acres. This would be the smallest acreage since 1970. Allendale’s production estimate is 53 million under last year’s level.

The results are based on the firm’s 27th annual Producer Acreage Survey. Submissions were made directly by producers in 25 states by phone and online from February 26, 2016 to March 11, 2016.
The United States Department of Agriculture is now surveying some 80,000 producers on their cropping intentions for the year. USDA's 2016 Prospective Plantings report is due March 31st.

Grain Stocks & Prospective Plantings Reports Previews

USDA will officially kick off the new year for the spring planted crops when it releases two reports on the last day of the month.

The Grain Stocks and Prospective Plantings reports will be released March 31st. Darrel Good says both will help set the tone of the trade for corn and soybeans going forward.

Quote Summary - The Stocks report will be modestly important as it always is for corn. It will give us a reading on how fast we are feeding last year’s crop, but the real information will be in the Prospective Plantings report. It can be a mixed bag. This is because we all know actual plantings deviate from intentions. Certainly, though, when we see the March survey and what farmers are planning this year, it will provide a lot of information about the potential size of the upcoming crops.

The Prospective Plantings report is set up to be very interesting. More than a few acres around the United States need a new home on the spreadsheets. For instance, last fall farmers seeded about 2.8 million fewer acres of winter wheat than they did the previous year. When you couple those acres with what most expect to be fewer Prevent Plant acres, it creates an interesting combination says the University of Illinois agricultural economist.

Quote Summary - On the surface this says, “We’ll have more acres available than we had last year”. What the intentions report will give us a hint at is whether producers are thinking about leaving some acreage idle in 2016 because of the generally low commodity prices. For example, will the winter wheat acres that didn’t get planted go to fallow, or to annual pasture, or will they go to sorghum or an oilseed. Will we see some of the so called fringe areas leave some acreage idled as the numbers would suggest we’ve seen in the past when prices are low. So, that big picture question will be most important in the March plantings report.

Again, the reports will be released March 31st. Last year there were 6.7 million acres of Prevent Plant. That’s on the high side because of the heavy 2015 rainfall. Darrel Good expects this year to be something closer to 3 million acres. And, when you round up to 3 million fewer acres of winter wheat, you get about 6 million float acres that need a home this year either idled, or planted.

Perspective for the Soybean Market

We’ll know a lot more about where the price of soybeans is headed at the end of this month. Still, it is useful to understand how price arrived where it is today.

Last fall USDA projected there would be about 475 million bushels of soybeans leftover by the close of the marketing year. That’s this fall. The agency has trimmed that number back over time. This month the target is 330 million bushels.

Usage has been really strong and it is important to remember says University of Illinois Ag Economist Darrel Good, but it did not change the balance sheet very much in this one month. Over time it has, however, been really supportive to the price of soybeans - keeping them above $9 a bushel on the board. Demand has held the bottom end of the market.

Supply, in the coming marketing year on-the-other-hand, is the problem at hand. The June 30th Acreage report is supposed to help clarify this matter. The spring rains, especially in Kansas and Missouri, may cause that not to happen says Good.

Quote Summary - The June acreage report will be interesting this year, for those two states and maybe more, because it will in fact still reflect some intentions for those acres not planted at survey time. How will producers report those intentions? Are they still planning to plant all the soybean acres if it dries out? Or have they already made a decision to abandon and go to prevent plant? So, even after the June number is released, uncertainty about acreage will remain. It will make the August and September FSA Prevent Plant acreage reports an important way to tweak the June number.

A tweak of three to five million acres of prevent plant for soybeans, thinks Darrel Good, would be enough to change the balance, shifting the overwhelming supply of soybeans that so far appears to be coming - consequently now pegged at 475 million bushels just like last year - to something far more supportive of price.

The Next Mile Post for Soybeans & the Crush

Farmers and the trade are very concerned the price of soybeans will fade over the next six months.

There are a couple of mile posts indicators most will be watching as it relates to the production of soybeans. University of Illinois Ag Economist John Newton says the next one up is the Prospective Plantings report due March 31st from the United States of Department of Agriculture.

Quote Summary - The Prospective Plantings report is a big one. It will give us an idea of how many acres of soybeans U.S. farmers expect to sow this spring. I’m also going to continue to watch the domestic soybean crush and U.S. soybean exports. The nation is on pace to export a record volume this year and USDA maintains this number will increase next year. This would be back to back record soybean export years and certainly worth monitoring. Can the world consume soybeans and the current level? If this is possible, then that should provide some price floor, even some positive price pressure from where we are today.

Exports are reported weekly by USDA and starting in August the ag department will begin reporting the soybean crush totals monthly. The agency is picking up and tweaking a discontinued Census Bureau report.

Quote Summary - The monthly numbers will aid the trade in monitoring the pace of the domestic soybean crush. Another item to keep in mind is the importance of the RFS (Renewable Fuel Standards). It may, at some point, cause soybeans to be crushed for oil. This would have implications for soybean meal and soybean meal prices and this may offset corn fed in the residual balance sheets. These are all things to watch. Some are long run and some are short run; the pace of consumption and soybean crush being the two short run things I’m watching.

You may read more from the University of Illinois ag economists on the Farm Doc Daily website. A new article is posted there each business day of the year.

Soybeans + Numbers

Those listening to the markets every day know there is a big difference between the number of acres the trade thinks will be planted to soybeans and the number of acres USDA is so far projecting. These aren’t as far apart as you might think and there may even be some positive wiggle room in them.



The trade has long thought U.S. farmers will plant about 86 million acres of soybeans. USDA thinks they’ll plant 83 and half million. Because USDA is using

Issues Stemming from January USDA Report

The final 2014 crop production numbers delivered by USDA in the January reports leave three issue unresolved.

The three problems, as identified by University of Illinois Ag Economist Darrel Good, center on the number of corn and soybean acres planted, the surprisingly small amount of corn used in the first three months of the marketing year, and the surprisingly large number of soybeans consumed in that same timeframe.

The difference between the total number of planted acres USDA NASS has reported over time and those officially reported by farmers to FSA , USDA’s Farm Service Agency, has grown. The number of acres planted to wheat, corn, and soybeans as tallied by USDA NASS has steadily grown larger than the number of acres farmers are telling FSA they’ve sown. USDA has not offered an explanation. The difference in 2014 is nearly 9.3 million acres over the three crops says Darrel Good.
He says the changing relationship between NASS acreage estimates and acreage reported to FSA may make early FSA reports less useful in anticipating NASS final acreage estimates.
The second issue is related to how much corn was used in the months of September, October, and November. Those are the first three months of the marketing year. USDA totals 4.25 billion bushels of disappearance of which feed and residual use accounted for 2.198 billion. This number is a 114 million bushels lower than the usage in the same period last year after it was revised down. The problem says the U of I number cruncher is that over time the range of usage represented in the first quarter figure as compared to total usage for the year has gotten wider.
First quarter use is no longer a reliable forecaster of total marketing year consumption. It means a lot of uncertainty will persist in the marketplace about how much corn is being fed to livestock.
The numbers do get better as time passes during the marketing year. The expectation is the March 31 Grain Stocks report will be more accurate.

The third issue with the January USDA figures is also in the consumption numbers. The implied residual disappearance of soybeans in the first quarter set a record. This might mean the size of the 2014 soybean crop was over estimated.
While this is an issue it will not be resolved for several months with some insight coming from the March Grain Stocks report.
Time will eventually fix all three issues, but it is important to recognize them and the potential changes these may bring to the commodity markets.

How Many Corn Acres in 2015



If corn farmers want a break even price for their crop next year, they’ll need to plant fewer acres of it. Todd Gleason has more on how one ag economist has forward figured the number of corn acres needed in 2015 to push cash prices back above four dollars a bushels.

It is True – 20% of the Farms Produce Most of the Value

The 2012 Census of Agriculture hold many unique facts. Researchers at the University of Illinois have been digging through the numbers to find some plumbs. Todd Gleason reports it seems an old adage is borne out by the figures.

There were about 75 thousand farms in Illinois when the 2012 Census of Agriculture was taken by the United Stated Department of Agriculture. The census, by two different measures – acreage operated & value of production – suggests the majority of Illinois farms are small by either categorization. However, there are two interesting facts that flow with these categorizations. The smaller the farm the more likely it is to produce livestock of less total value, and the larger the farm the more likely it is to produce crops – mostly grains and oilseeds - of much greater value.

The Census of Agriculture defines a farm as any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during the reference year. The Census classifies each farm's production specialization based on the North American Industry Classification System (NAICS). A "Livestock" farm is