The USDA released two major reports to finish March. These were the quarterly stocks data and the planting intentions report. There were a few surprises in this data, primarily the larger than expected U.S. corn acreage figure.

For corn, the USDA is forecasting plantings of 95.3 million this year, a 4.73 million increase from last year. Corn acreage is forecast to increase in 40 of the 48 main corn production states. A big reason for this gain in corn is a 12 percent reduction to projected U.S. cotton acres. Soybean acres are forecast at 83.5 million, -4 percent from a year ago. Soybean acres are expected to fall in 23 of the 29 main production states. U.S. wheat plantings are forecast at 45.4 million, a 2 percent reduction from a year ago. This will be the second lowest U.S. wheat acreage since record keeping started in 1919. Compared to trade estimates, this year’s plantings will be larger than expected while soybeans and wheat are below average trade guesses.

One number from the planting intentions that stood out was total U.S. production area. Total U.S. acres for all crops this year are forecast at 309,940 million. This is down slightly from last year’s 311,208 million acres. These are both well below the 319,500 million acres of production from 2023. Urban sprawl is a major reason for this, but so is a trend of focusing production on higher quality land.

Quarterly stocks data as of March 1st was mixed. The U.S. corn stocks stood at 8.15 billion bu, -2 percent from a year ago. On-farm corn stocks were down 11 percent from last year and off-farm stocks were up 12 percent. Corn disappearance in the 1st quarter was up 100 million bu from last year. U.S. soybean stocks on March 1st totaled 1.91 bbu, a 4 percent increase from March 2024. On-farm soybean stocks were down 6 percent on the year while off-farm were up 13 percent. First quarter soybean disappearance was up 3 percent from last year. Wheat stocks came in at 1.24 bbu, a 14 percent increase on the year. On-farm wheat inventory was up 13 percent and off-farm stocks were up 14 percent. A total of 336 mbu of wheat was consumed in the 1st quarter, a 1 percent increase from a year ago.

Even with the advancing Brazilian soybean harvest and build in the country’s export program, soybean basis continues to firm. Soybean trade between Brazil and China has seen values firm 60 cents since the end of China’s Lunar New Year celebration. Brazil’s soybean shipments have been slowed this year, leaving China with more coverage needs than usual. China currently has 80 percent of April’s soybean needs covered, but just 50 percent of May and 32 percent of June’s needs. While much of this demand will be covered by Brazil, there is room for some quick ship business if delays to that country’s exports continue.

The year-round use of E-15 has long been pushed for by the industry, but now not all states are wishing to see the elevated blend rate right now. Ohio and South Dakota have asked to have the year-round use of E-15 delayed for another year, joining several others. States had until Feb. 26 to request an extension. The only states that will implement year around E-15 use are Iowa, Illinois, Minnesota, Missouri, Nebraska and Wisconsin.

Over the past several weeks we have seen a reduction in Chinese import demand, mainly on feed grains. The USDA has trimmed China’s corn import projection for seven consecutive months. We are also seeing reductions to wheat and sorghum imports since last fall. China is now forecast to import 28.5 mmt of fed grain this year, 23 mmt less than what was projected last August. This drops China to the 3rd largest feed grain importer, behind the European Union at 31.5 mmt and Mexico at 30.9 mmt. A declining livestock herd, more efficient livestock production, and record domestic crops are behind the drop in China’s import demand.

Consumer confidence is on a rapid decline in the United States as fears of a recession following U.S. trade disputes are growing. Consumer confidence has declined for four consecutive months and is now at the lowest level in 12 years, falling below the COVID pandemic period. A concern in the economy now is that we may shift into a period of stagnation or even deflation as consumer sentiment drops. Commodity demand tends to fade in times of low consumer confidence, especially for high priced products, including several cuts of U.S. beef.

The March hog and pig inventory report showed a slightly smaller hog herd than what was expected. As of March 1, the U.S. had 74.5 million hogs in inventory, 100 percent of last year. This was 1 percent less than expected. Breeding hogs were 99 percent of a year ago at 5.98 million head. Market hogs came in at 68.5 million, 100 percent of a year ago. These were both 1 percent less than expected. The lower hog numbers were in part from smaller litter sizes. While minimal, this decline in hogs is worth monitoring given the U.S. pork supply is the lowest since 1997.

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