- HEADLINES: NASS shocks traders with US intended corn acres of 89.5 million; Soybean intended acres record large at 91.0 million; soy/corn ratio narrows to 2.1:1.
- The NASS March Intentions Seeding Report was bullish for corn/wheat and bearish for soybeans. Combined US corn/soybean seedings rose to 180.5 million acres, down 100,000 from last year. US all wheat acres rose by 700,000 acres to just 47.4 million acres. Northern Plains farmers opted to seed more soybeans vs spring wheat due to margin. Expanding US farmed acres is difficult and gets us back to our winter long discussion of “Peak US Farmland”. There just is no more land to bring into production.
- Record high US fertiliser costs bit US farmers with a larger than expected fall in 2022 corn seeding intentions at 89.5 million acres, down 3.9 million from last year. The “I” states each witnessed a decline of 300,000 acres of intended corn acres for 900,000 acres in total. North Dakota corn acres fell 500,000 acres. We would note that these are only intentions and will be adjusted with spring weather.
- US soybean seedings were record large at 91.0 million acres, up 3.8 million from 2021. The low soybean/corn ratio played a limited role in Midwest and Northern Plains seeding decisions. Every Midwest State recorded a soybean seeding gain.
- We would note that it was not profit margins that determined US intended 2022 soy acres, but more likely the high cost of crop inputs. IL intended to plant 400,000 acres more, IN 250,000 acres more and IA 300,000 soy acres more than 2021.
- Soy seeding gains included the Delta where soybeans/cotton competed for acres. 2021 US cotton seeding intentions were up 1.0 million at 12.2 million acres. WASDE will forecast that the US will produce a record 4.6 billion bu soy crop.
- US all wheat seedings were 47.4 million acres with winter wheat seedings rising to 34.2 million compared to 33.6 million last year. The 600,000 acre gain in winter wheat seeding was less than initially forecast. And US spring wheat intended acres fell 200,000 acres to 11.2 million with durum seedings rising 300,000. The 500,000 acre drop in US HRS wheat seeding was the big surprise and should underpin Minneapolis wheat vs Chicago/KC. Northern Plains farmers opted to seed soybeans with input costs roughly the same.
- US March 1 corn stocks were estimated at 7,850 million bu, up 154 million from last year, but down 35 million bu from trade expectations. We calculate the second quarter corn feed/residual at 1,385 million bu. This compared to 1,429 last year or down 44 million bu or 3%.
- Amid the sizeable US corn export program that is underway, US 2021/22 corn stocks are tightening and could dip near 1,050-1,100 million bu. This would raise the upside price target for either May or July corn futures closer to $8.00.
- US March 1 soybean stocks were 1,931 million bu, up 369 million from last year. The average trade estimate called for US March 1 soybean stocks of 1,893 million bu, so the actual estimate was 38 million more. We calculate the second quarter residual at -21 million bu vs -57 million last year. The slower export program is the culprit in US March 1 soybean stocks gain. The stocks report is slightly bearish which could pressure July soybeans to $15.50-15.75 support.
- US March 1 wheat stocks were 1,025 million bu, down a hefty 286 million from last year, and down 39 million from trade expectations. The larger fall is related to greater feed use. We look for WASDE to adjust its 2021/22 US wheat feeding estimate up by 15-20 million bu. US March 1 wheat end stocks are the smallest in well over a decade which mandates a large 2022 harvest. We maintain that December KC wheat should not fall too far below $10.00.
- Grain markets are outright bullish with corn to be the upside leader in new crop as US 2022/23 corn end stocks fall well below 1,000 million bu. Wheat follows with the drought in the Plains gaining in market importance. Traders understand March 1 seeding surveys were only intentions and not the final figure that will be released in June. Favourable weather could allow Midwest farmers to seed another 1-2 million acres of corn at the expense of soy. The key point is that total US cropped acres is not expanding which places additional importance on 2022 yield. Do not turn bearish on soybeans on this report amid record large oilseed demand. Stay bullish grains.