Many industries are struggling to cope with COVID-19, but in agriculture farmers still have to plant. Today (March 31, 2020) the United States Department of Agriculture (USDA) released its 2020 planting intentions report.
Canadian farmers are watching this report very closely as the U.S. corn and soybean acreage — and possible carryout — impacts Canadian farm gate prices.
The numbers are a little staggering — with corn at just shy of 97 million, and soybeans at 83.5 million intended.
Ted Seifried, chief market strategist at Zaner Ag Hedge, says we need to keep in mind this survey was done 45 days ago, before the COVID-19 pandemic had hit North America.
Seifried says that he suspects corn acres to pull back 1.5 to 2 million acres, but that’s still a really high watermark to start from. The combined total also puts intended acres in the 180-185 million-acre range, but he figures total planted acres will settle somewhere lower, around 178 to 179 million acres total.
Quarterly grain stocks were more friendly for corn, Seifried says, although, again, these are numbers from the beginning of March, before we saw major market dives and the pullback in oil prices, which impacts ethanol product.
It’s not all bad, of course. Seifried says, “I’m wondering if we’re going to turn around and push (corn prices) back up again? We’ve seen the largest acreage number we’re going to see. We’ve ripped the bandaid off, so to speak,” he says.
The 83.5 million-acre mark for beans is a little low, he says, given that soybean stocks are down, and there are anticipated sales by China for the end of 2020 that will need the supply. If you move 1.5 million to 2 million from corn into beans, 85 to 86 is where it plays out, he says, and we’re probably going to need those bean acres and stocks.
Listen on for a full discussion on the March 31 USDA report: