The just released USDA March Prospective Plantings Report for the 2022 growing season holds some surprises, reflecting the current uncertainty and volatility that producers are factoring into their decisions. Matt Erickson, our economist, provides perspective on what current intentions to plant less corn and more soybeans might mean for supplies, markets and more.
Chart Summary
- Market expectations ahead of USDA’s March 31 plantings report pegged corn acreage for 2022 in the range of 89.7 million and 93.5 million acres, with an average estimate of 92 million acres.
- Producers intend to plant approximately 89.5 million acres of corn, which is 4% below 2021 corn acres and lower than the range from pre-report expectations. If realized, this plantings level would be the lowest seen since marketing year 2018/19 and well below the 10-year average of 91.8 million acres.
- In 43 of the 48 surveyed states, corn acreage is expected to be lower or unchanged from 2021.
- Iowa is expected to plant 12.6 million acres, down 300,000 acres compared to 2021; Nebraska 9.7 million acres, down 200,000; South Dakota, 6.2 million acres, down 50,000; and Kansas: 5.4 million acres, down 300,000 less than 2021.
What This Means
Corn planting intentions were one of the biggest surprises in the USDA planting report. Juxtaposed against expectations for more soybean acres, corn intentions reflect the challenges of high fertilizer prices and supply chain disruptions from last fall and winter.
If realized, producers’ intentions to plant 89.5 million acres of corn have the potential to lead to a tighter overall corn market. For perspective, USDA’s 2022 baseline projected the stocks-to-use ratio for the next marketing year (2022/23) at 13% on the expectation of an averaged 92 million acres of corn. The ratio drops to 10.2% -- assuming all other factors hold constant. This still would be a heavier stocks-to-use level compared to what we’ve seen the past couple years. The reason: USDA’s 2022 baseline estimates average corn yield for the 2022 crop at 181 bushels per acre. If the 89.5-million-acre planting level holds, even with trendline yields, corn will be tight in 2022 and heading into 2023.
December 2022 corn futures closed over $0.25 higher at $6.81 per bushel after USDA pegged corn below analyst and trader expectations. Also influencing markets are uncertainty about the Ukrainian corn crop, ongoing drought in South America impacting Brazil’s larger second corn crop and high domestic demand.
While much can shift and change in the coming weeks and months, robust yields will be needed to maintain production in an environment of below-average corn acres and high demand. USDA’s June acreage report will be important to watch.
Chart Summary
- The chart shows corn and soybean planted acreage from 2007 through producer’s intentions for 2022. The blue columns show total corn plus soybean acreage.
- Since 2007, there has been only one year in which producers planted more soybeans than corn -- 2018.
- Producers intend to plant approximately 91 million acres of soybeans vs. 89.5 million acres of corn. If the soybean planted acreage number is realized, this would be the largest amount on record.
- Pre-report market expectations pegged soybean acreage for 2022 in the range between 86 million acres and 92.2 million acres, with an average estimate of 87.2 million acres. USDA’s survey pegged soybean planted acreage at the upper end of the range.
- In 24 of 29 states surveyed, soybean acreage is expected to be up or unchanged compared to 2021.
- Iowa is expected to plant 10.4 million acres, an increase of 300,000 acres compared to 2021; Nebraska, 5.7 million acres, up 100,000 acres; South Dakota, 5.7 million acres, up 250,000; and Kansas, 5 million acres , up 150,000.
What This Means
The largest increases in planted soybean acres are expected in Illinois and Missouri, where producers in each state intend to plant 400,000 more acres compared to 2021. If realized, the planted area of soybeans in Illinois, Kentucky, Michigan, Missouri, Nebraska, Ohio, South Dakota and Wisconsin will be the largest on record. This would be the first time since 2018 that soybean acres exceeded corn.
While fertilizer availability was a concern last fall and winter, there are few reports of actual shortages. Producers may have balked at paying high fertilizer prices and decided to switch acres to soybeans. High soybean prices likely also grabbed some acres in southern states, in particular in rice producing regions where soybeans are part of the rotation. Rice planting intentions for Arkansas are down 2% and soybean intentions are up 7% compared to 2021. Rice intentions also are down in Mississippi and Missouri, with 5% fewer rice acres expected in each state.
Overall, the USDA Prospective Plantings Report was bearish for soybeans; November 2022 soybean futures were down $0.51 at $14.18 per bushel. But don’t forget, world stocks for soybeans are extremely tight. This will keep the bulls from leaving, while the bears will keep a close eye on the U.S. crop and the magnitude of production.
