March Prospective Plantings Report and the Market
Mar 28, 2024
Zack Gardner
Grain Marketing and Origination Specialist
The Last Bear Story for Corn: Stocks
Today (March 28th), we had the big March Prospective Plantings report and it was a surprise to say the least! Soybean stocks and acres came in exactly as anticipated by the market, with 86.50 million acres. For corn, the market was expecting 91.70 million acres and the USDA came in at 90 million! This changes the outlook for corn markets. Recently we have seen phenomenal corn exports to Mexico, great corn demand from the ethanol sector and now, approximately 2 million less expected corn acres this year. So why don’t we have $5.00 cash corn yet? Because of old crop stocks.There are a lot of old crop stocks ready to hit the market and offset the funds traders buying back their short positions. We are estimated to have 8.30 billion bushels worth of corn stocks on hand versus 7.30 billion bushels at this time last year. So, as we hope this rally continues post-report, one thing to think about is how old crop stocks might offset the excitement from the bushels lost from fewer new crop acres. It may be that we see more of a rally for new crop as old crop prices get suppressed by the larger stocks getting sold.
A Mixed Bag of Headlines: Weather
This past week, the corn belt received some phenomenal moisture (except for the southeastern quadrant of Iowa) which improved a large portion of the drought monitor.
The mixed bag of headlines comes from the potential transition from El Nino to La Nina. El Nino should bring us a wet spring that will hopefully allow us to catch up on moisture. July, August and September are predicted to be hot and dry. The transition to La Nina (hot/dry) isn’t being refuted very much; however, the variety in headlines comes from predictions of the severity of the hot/dry conditions that we will experience late summer. It could be the hot, dry weather that our drought-resistant seed varieties thrive in, or it could be 2012-like hot and dry conditions. There has been an incredibly wide range of predictions for our late summer time frame.
If you have questions about your marketing strategy, contact a member of the Key Cooperative Grain Team.