Lower Corn Planting Intentions
Reflecting Weakness In Markets

By Jose G. Peña
Extension economist

USDA's initial U.S. planting intention report for 1999, released on March 31, indicated that farmers will plant 78.2 million acres of corn this year, down close to 2 million acres (2.5 percent) from 80.2 million acres planted last year, and down 1.7 percent from 79.537 million acres planted in 1997, but up 9.4 percent from 71.5 million acres planted in 1995 when corn prices reached 25-year highs.

The recent market rally is probably attributable to market anticipation of lower plantings. The corn, wheat and feedgrain markets, however, were down as of this writing, probably influenced by USDA's corn stocks report, showing corn, soybean and wheat stocks up 15, 21 and 24 percent, respectively, from a year ago at this same time.

If the current estimate of corn planting intentions materializes, this will be the lowest planted acreage since 1995. If, however, close to average yields produced in the U.S. in 1998 are achieved, corn production could still reach 9.6 billion bushels. Expected acreages are down in the upper Midwest, the Southwest, Texas, and the Southeast due to a shift to other crops. Intended acreage is up slightly in the central Cornbelt, due, in part, to land coming back into production after flooding in 1998.

Corn plantings in Texas at 1.9 million acres are down one-half million acres (20.8 percent) from 2.4 million acres planted last year, compared to hay plantings which are up 14 percent, and upland cotton plantings which are up one percent.

U.S. sorghum plantings are expected to total only 8.8 million acres, down 8.5 percent from 9.626 million acres planted last year and down 12.4 percent from 10.052 million acres planted in 1997.

Related to corn and wheat markets, soybean growers intend to plant 73.1 million acres in 1999, up one percent from 1998 and 4.4 percent above 1997. If realized, this will be the largest planted area for soybeans on record. According to USDA's planting intentions report, of the 30 soybean producing states, producers in 10 states intend to plant more acres this year, while producers in 14 states are indicating fewer acres to be planted in 1999. Six states are unchanged from last year.

All wheat seeded area will total 63 million acres, down 4.3 percent from 65.9 million acres planted last year, and the lowest level in 26 years.

Winter wheat at 43.4 million acres will be down 6.6 percent from 46.449 million acres planted last year and down 9.6 percent from 47.985 million acres planted in 1997.

Durum wheat acres are expected to increase to 4.3 million acres in 1999, up 12.2 percent from last year and the highest since 1982.

Acres planted to other spring wheat varieties in 1999 are expected to drop 1.6 percent from 1998 to 15.36 million acres, the lowest since 1988. According to USDA's planting intention report, about 14.5 million acres of this total acreage are Hard Red spring wheat varieties.

All cotton plantings for 1999 are expected to total 13.944 million acres, up 3.9 percent from 13.418 million acres planted last year and up .3 percent from 13.898 million acres planted in 1997, but down 4.8 percent from 14.653 million acres planted in 1996. The Delta region shows a nine percent increase from the last year. While Texas is up less than one percent, some newer cotton-producing states such as Oklahoma and Kansas are up and 41 and 71 percent, respectively. Although California growers intend to plant 50,000 more acres of American-Pima cotton this year, the U.S. acreage intended for plantings to pima at 305,200 acres is down seven percent from 329,900 acres planted last year.

It appears that the higher U.S. cotton planting intentions were anticipated by the industry. Cotton commodity futures prices at the New York Cotton Exchange have been bearish for some time.

Using the average ratio of planted compared to harvested acreage and seasonal average yields over the past nine years, cotton production could reach 17.1 million bales in 1999, up 24.8 percent from the current estimate of 13.796 million bales produced during the 1998/99 season, but down 9.3 percent from 18.973 million bales produced in 1997.

Corn stocks in all positions on March 1 totaled 5.7 billion bushels, up 15 percent from March 1, 1998. Of the total stocks, 3.57 billion bushels were stored on farms, up 20 percent from a year ago. Off-farm stocks, at 2.13 billion bushels, were up eight percent from a year ago.

All wheat and soybeans stored in all positions on March 1 totaled 1.44 and 1.46 billion bushels, up 24 and 21 percent, respectively, from a year ago. Wheat stocks are the biggest March number since 1988.

To sum up the impact of these reports (planting intention and stocks reports), one need only look at the reaction of the futures markets. The market is showing signs of weakness. While plantings are down, stocks of related commodities are way up and are tempering the market.

The planting intentions, however, suggest that corn and feedgrains will decrease slightly. Supplies (production and stocks) of commodity related soybeans will increase. This appears to indicate that current weak market conditions will continue due to the size of the old crop. Lower supplies, as a result of lower plantings, suggest that the market may recover as we move into the new crop year.