Grain and feed markets are getting ready for the first initial estimates of how much US acreage will be devoted to each crop, and position evening often is the rule of the day for many.
The March 29 USDA Prospective Plantings report will provide that initial indication of potential acreage allotments and set the tone for production potential, said Todd Hubbs, University of Illinois agricultural economist in the Extension Agency’s Farmdocdaily.
Uncertainty on trade issues and the associated subsequent price movements add a degree of difficulty to acreage decisions this year, as do flooding considerations.
Estimates of planted acreage begin with analyzing the amount of acreage available for planting, Hubbs said. From 2016 through 2018, total acreage for principal crops tracked by the USDA came in at 319, 318.3 and 319.6 million, respectively. Adding in Conservation Reserve Program and prevent plant acres, acreage totaled 346.3, 344.3 and 345.0 million acres.
PRINCIPAL CROP ACREAGE
Over the same period, corn, soybean and wheat acreage combined came in at 227.6, 226.4 and 226.1 million acres, respectively, Hubbs said. Current USDA projections for the three crops indicates 224 million acres planted.
That lower estimate implies either a drop in principal crop acreage or an increase for other crops, Hubbs said.
A potential reduction in planted acres will not materialize through an increase in CRP acres, Hubbs said. Through January, CRP acreage enrollment was reported at 22.4 million acres, down from 23.5 million last year.
The government shutdown and uncertainty in CRP acreage enrollment deadlines led to enrollments coming in below the 24 million acres set forth as the statutory limit, Hubbs said. Lower CRP acreage enrollment in 2019 may be negligible when considering acreage planted in major spring crops.
The possibility of lower corn acreage remains a dominant consideration because of fieldwork issues, high fertilizer costs and poor weather conditions. Soybean acreage expectations indicate much lower acreage than last year’s 89.2 million with projections ranging from 84.3 to 85.6 million.
WEATHER TO HAVE MAJOR EFFECT
While the effect of lower CRP acreage looks to be minimal, spring weather conditions appear set to have a significant influence on spring plantings, he said.
The prospect of a wet spring looks to exacerbate issues in many areas, Hubbs said. In particular, the western Corn Belt may see problems with more moisture on top of a significant snowpack.
Prevent-plant acres totaled only 1.9 million in 2018, down from the previous three years in which they were 6.7, 3.4 and 2.6 million, respectively.
Flooding and wet conditions in those areas may lead to an increase in prevented plantings and presumably would reduce total acreage. A return to average prevented plantings would diminish possible acreage availability.
Competition for corn and soybean acres this spring focuses on spring wheat and cotton acreage in some major production regions, he said. Winter wheat seedings came in 4% lower than last year. At 31.3 million, winter wheat planting sits 1.24 million acres less than a year ago.
CATTLE, BEEF RECAP
Cash cattle trade was reported this week at $128 to $130 per cwt on a live basis, up $2 from the bulk of last week’s action, and at $203 to $204 on a dressed basis, steady with most of last week’s trade.
The USDA choice cutout Thursday was up $0.64 per cwt at $229.31, while select was off $0.26 at $218.37. The choice/select spread widened to $10.94 from $10.04 with 91 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday, was $139.12 per cwt, up $1.71. This compares with Thursday’s Mar contract settlement of $142.77, up $0.52.