- HEADLINES: NASS seeding report rallies corn/wheat; Soybeans lag on expected jump in US seedings; Total US 2024 intended seeded acres falls 6.6 million.
- The USDA March Stocks finals held few surprises compared to estimates. NASS forecast March 1 US corn stocks at 8,347 million bu, 7 million less than some forecast, but 85 million bu less than the average trade estimate. We calculate a Q2 corn feed/residual use rate of 1,559 million bu, 129 million bu more than last year. Total US Q2 use was 3,830 million bu, the second largest on record. The prior quarterly use rate was set back in December-February of 2021/22 at 3,880 million bu. US March 1 corn stocks at 8,347 million bu are 951 million bu greater than last year, but the strong usage trajectory should drop 2023/24 corn stocks below 2,000 million bu by the final count.
- US March 1 soybean stocks were 1,845 million bu with the quarterly residual being a negative 24 million bu. This compares to -23 million bu for the same quarter last year. US March 1 soybean stocks are up 158 million bu from last year or 4.3 million mt. This stocks gain highlights the importance of the final size of the 2024 Brazilian and Argentine soy crops. USDA is unlikely to raise its old crop end stocks forecast at 315 million bu in April.
- The NASS March Seeding report was bullish of corn and neutral for wheat and soybeans relative to expectations. US farmers responded to low price and profit forecasts and cut US corn seeding back to 90 million acres. Spread unwinding of long soybeans vs grains is pressuring the soybean market at midday, but the grains are sharply higher on fund short covering.
- Total US farmed acres fell to 313.3 million acres, down 6.6 million acres from last year. Iowa farmers are forecast to plant 24.1 million acres, Illinois farmers 22.7 million (each equal with last year), Kansas 23.7 million acres (down 5%), Texas at 20.9 million acres (down 5.4%) with North Dakota planting 23.5 million acres (down 2.2%). Total US farmed acres rarely rise more than 500,000 acres from intentions and the final June forecast. We have confidence that US producers reported the cropped acres they intend to farm in 2024.
- NASS forecast total US corn acres at 90.0 million acres, down 4.6 million from last year. Assuming a record 181 bushels/acre yield, the total US corn crop would be just over 15 billion bu. This would be down 180 million bu from the Outlook Forum estimate of February. US soybean seedings at 86.5 million bu were at trade expectations with a yield of 52 bushels/acre producing a 2024 US soy crop of 4,453 million bu. This is down 50 million bu from the Outlook Forum which drops 2024/25 US soy end stocks to 385 million bu. Such stocks do not argue for November to fall too far below $11.75 this spring.
- March US Wheat stocks and seedings data leans mixed, fundamentally, but it is weather that matters most beginning in April. March 1 wheat stocks were 1.087 billion bu, 30 million above the market’s expectation and which implies Dec-Feb feed/residual disappearance at -48 million bu, vs. -11 Mil a year ago.
- However, cumulative Jun-Feb feed/residual is calculated at 139 million bu, vs. 95 million. USDA will lower their annual wheat feed number by only 5-10 million bu in the April WASDE. End stocks will be lifted a similar amount.
- All wheat seedings are pegged at 47.5 million acres, 500,000 above expectations and down 2.1 million year on year. Assuming normal abandonment and trend yield, new crop US wheat stocks reach 720-750 million bu. Yet, SRW seedings were trimmed 600,000. HRW seedings were increased a modest 300,000. HRS seedings are projected at 10.7 million acres, up only 200,000 year on year. It is the US durum balance sheet that loosens significantly as 2024 acres expanded by 350,000 (22%) from last year.
- The long awaited March stocks and seedings report has come and gone, and bearish surprises were lacking. Producers are unwilling to expand total acres amid deflated prices and as CRP acres increase. Old and new crop corn end stocks are in retreat, and it remains that favourable N Hemisphere/trend yields are needed to be bearish of ag markets at current prices. Any new bearish trend has been pushed back to Jul/August. Acute focus on weather patterns develops in the next 90-120 days.