We apologize for the delay in discussing these important reports but believe that the impact of LFTB on beef, cattle and other protein markets warranted the delay. In this day of high and volatile crop prices and feed costs, it takes an important item indeed to supplant these spring reports. We think LFTB is such an issue — at least for now.

Now to the grain reports. USDA released on Friday its annual prospective plantings reports that indicate farmers’ intentions regarding crop plantings for the 2012 growing season. The estimates are derived from surveys conducted the first two weeks of March. They represent intentions for all crops except winter wheat which was seeded last fall. The winter wheat acreage estimates in the Prospective Plantings report is a revision rather than an intentions estimate. Winter wheat is included in the all-wheat acres shown in our tables. The key numbers for corn, soybeans and all wheat appear in the top table at right. Estimated corn plantings of 95.864 million acres were larger than the highest of analysts’ pre-report estimates and represent the highest total corn acres since World War II. Recordhigh acres that are beyond the top of expectations should be bearish for new crop corn, right? We all know now that new crop corn gained 13-16 cents per bushel on Friday, defying those bearish impacts and possibly reflecting the negative sentiments and uncertainty of the market going in to the report.

Further, these projected large corn acres could get even larger given the levels of early planting. Yesterday’s first Crop Progress report of the season indicated that 3% of intended corn acres in 18 leading states had been planted as of Sunday. That compares to 2% last year and a five-year average of 2%. But the numbers aren’t the story. The locations are. Texas is the normal contributor of virtually all early planting. This year Illinois, Indiana, Kentucky, Michigan, Ohio and North Carolina appear on the initial planting progress list. In addition, 7% of Missouri’s acres are planted compared to a normal of 3%, which we think is primarily the Bootheel region in far southeast Missouri. USDA showed no data for Iowa though we know of a good number of acres planted there with some of that corn already emerged. We expect a big jump in these planting numbers in next week’s report and the old adage is that if the weather is good, farmers will plant corn if at all possible. Soybeans are not at the economic disadvantage they saw last winter but an early start to planting will favor even more corn acres if the weather allows — and forecasts are favorable at present.

The second table at right shows acreage data for the eight major crops and hay for 2010 and 2011 as well as planting intentions from Friday’s report. The gains of 4.274 million acres in crop plantings and 1.715 million acres for hay acres harvested look reasonable to us. Last year’s wet spring in the eastern Cornbelt and Missouri River basin prevented planting on a good number of acres. Dry conditions in the southwest and some southern states reduced hay harvests. Both of those situations are better as we go into the spring of 2012 and, should “normal” weather conditions prevail, result in acreage increases.

Friday’s Grain Stocks report was, for once, generally within the realm of analysts’ expectations. See the bottom table below. March 1 corn stocks were estimated to be 6.009 billion bushels, slightly smaller than the average of the analysts’ estimate and over 500 million bushels lower than one year ago. Old crop (May and July) corn futures gained 39 and 40 cents/bushel, respectively, in Friday’s trading. The absence of those 250 million “surprise” bushels in the December 1 inventory apparently convinced the market that some rationing was still needed to stretch 2011 supplies to the end of the crop year.

The big winner among all of these numbers was the soybean complex in general and soybean meal in particular. Bean meal futures through Feb ‘13 set contract life highs on Friday.

Further Reading

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You can view the full report with tables by clicking here.