The case of the missing acres
It was another dismal week for grain prices.
Two major United States Department of Agriculture reports last week – one on projected acreages and the other on grain supply – caused traders to bid down prices in Chicago, Winnipeg and other markets.
The weird thing is that although the USDA acreage numbers confirmed traders’ expectations for soybeans, the figures for corn and spring wheat were lower than expected.
The trade predicted 81.8 million acres in corn but the USDA forecast a million acres less. The trade predicted 17.76 million acres in spring wheat; the USDA number was 16.32 million.
Read Also
VIDEO: 2025 pulse and special crops convention kicks off in Whistler
Western Producer reporter Sean Pratt is in Whistler, B.C., covering the 2025 annual Pulse & Special Crops Convention. Follow along…
That should have buoyed corn and wheat prices, but they fell. Why?
The trade didn’t believe the USDA’s numbers and chose to follow its own forecasts and other negative factors.
It was suspicious because when you add up the USDA’s totals for all crops – corn, soybean, sorghum,wheat, durum and cotton – you find three to four million acres of crop land unaccounted for. Also, most analysts expect two to four million acres will come out of the conservation reserve. Where are they? The USDA had no explanation.
So traders focused on more negative information such as high ending stocks, good growing weather in the winter wheat belt and big South American soybean crops.
As of March 1, the USDA put corn stocks at 125 million tonnes, 10 percent above a year ago due to slow domestic livestock use and exports. Wheat stocks were 31.74 million tonnes, up 42 percent over the same time in 1997. Soybean stocks were 32.73 million tonnes, up 14 percent.
According to the International Grains Council, on a worldwide basis 1997-98 year-end wheat stocks will be 129 million tonnes, 17-18 million tonnes more than the previous two years,.
The council forecasts 1998-99 wheat production will be down from the 1997-98 record by about 15 million tonnes, to 593 million tonnes.
Smaller crops are expected in Canada and the United States. Australia and Argentina will be the same as last year while Europe and North Africa will see larger crops, the council said.
Consumption is expected to jump by nine million tonnes to 600 million, resulting in more manageable year-end stocks of 122 million tonnes, but that is still 11 million more than the mid-1990s.
