What Do Planting Intentions Mean to Your Business?
by: Bill Latham
Ever since the Prospective Plantings and Grain Stocks reports were issued last Friday, March 30, we’ve been trying to analyze the situation. Like many of you, we’re trying to decide how this news – and its impact on commodity markets – might impact our business. This could certainly be another roller coaster of a ride!
American farmers are expected to plant 95.9 million acres of corn this spring, which is above the market expectations of 94.7 million. In fact, this would be the largest number of corn acres planted since 1937, so the expected yields are multiples over the 1937 crop. North Dakota leads the “prospective plantings report” with a amazing 1.7 million acres of increase. Minnesota is up 600,000 acres. Iowa is up 500,000 acres, and Nebraska up 450,000 acres.
Barring weather problems, we’re in for a monstrous corn crop, especially with our new genetics and traits. But there is also a lot of demand for this crop. It’s a hungry world out there coupled with ethanol usage. Markets seemed to absorb the news Friday with futures increases. Even though local new crop prices at just over $5 are more than a dollar less than last season, the upside price potential may not be very good. Even though we need to replenish supplies, this is a lot of expected corn, folks.
The soybean situation is quite bullish at 73.9 million acres, below the market expectations of 75.4, and the resulting market is reflecting this. That is about 1 million acres less than last year, and experts tell us that is almost a one-to-one switch to corn acres. One would think this would mean local new crop prices north of $13, but so much depends on other factors such as weather, South American production, world economies, currencies, etc.
I’m always amazed and impressed with the adaptability of American farmers to react to conditions each year. Give them a challenge, and they will make the adjustments and come through! We’ll see what role Mother Nature plays in turning planting intentions into reality. Thankfully, we have a full lineup of top-shelf Latham® Hi-Tech Hybrids and Latham® Hi-Tech Soybeans to meet your needs… even if those needs change in-season.