Big acreage swings on the way
The largest acreage shift could likely be in the Mississippi Delta where producers will plant less corn and more cotton.
By Richard Brock
On February 15, the USDA released their first estimate of planted acreage this coming spring. The changes were large but were also expected. USDA is projecting that planted area for corn this coming spring is expected to be 91.0 million acres, down 3.6 million from last year. Soybean planted area is expected to be 87.5 million acres, up 3.9 million from last year. The table shows our own estimates, including not just corn and soybeans, but also wheat and cotton.
The largest acreage shift could likely be in the Mississippi Delta where producers will plant less corn and more cotton. Even though our estimate is only 10.5 million acres, it could be as high as 11.5 million acres. Cotton is much more profitable than corn or soybeans.
We are projecting that U.S. corn ending stocks for 2024/25 will be 2.475 billion bushels, up 235 million versus our projection of 2,240 billion this marketing year.For soybeans, we anticipate that 2024/25 ending stocks will increase by 135 million bushels to 421 million from this year’s 285 million.
What this means for the feed industry is quite simple. Prices are likely to stay at low levels for both corn and soybean meal for quite some time. For any bull market to happen between now and the end of this summer, producers need to be faced with some severe weather problems. Demand is not going to bale the farmer out with such large carryover supplies.
Without some major production problems either in the U.S. or in Brazil, grain and soybean meal prices will have to go through a base building phase. This could take a long time. Three to five years would not be at all surprising. The anticipation of renewable diesel adding a bullish influence to the soybean complex, in our opinion, will not likely happen. The domestic demand for soybeans is going to be offset by the loss of exports which is being taken over by Brazil. The net impact is going to be close to a zero-sum game. Carryover supplies of soybeans and soybean meal are rocketing upward.
Richard Brock is owner and president of Brock Associates, an agricultural marketing advisory service and publisher of The Brock Report, a 20 page weekly fundamental and technical newsletter. His firm, now with seven offices, manages grain sales on over 700,000 acres throughout the U.S. and is an advisor on purchasing strategies for many large poultry, pork, dairy and food companies.