SASKATOON — Despite higher loan rates and zero acreage set-asides, Uncle Sam hasn’t successfully enticed American farmers to plant substantially more oats, barley, spring wheat or durum wheat this year.
With stocks of these commodities on the low end of the historical scale, it means U.S. commodity markets are going to be especially sensitive to weather this spring.
U.S. farmers told the United States department of agriculture they intend to seed almost seven million acres of oats; 7.5 million acres of barley, 2.6 million acres of durum and 18.1 million acres of other wheat, including dark northern spring wheat from the Great Plains states and soft white spring wheat from the Pacific Northwest states.
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USDA released its 1994 planting intentions report — one of the most-watched reports of the calendar year — on March 31.
In the case of oats and barley, the acreages farmers will seed are the lowest they’ve been since USDA started making these estimates in 1866.
Oats acreage is down 13 percent from 1993 (although farmers indicated they intend to harvest 14 percent more acres of the crop than they did last year). Barley acreage is down by three percent.
Durum wheat acreage, predicted to be 2.59 million acres, is 18 percent higher than last year but just 84 percent of the 10-year average for the crop. Market analysts were looking for a steep increase in durum acres, since prices are the highest they’ve been since the drought of 1988.
Traders surprised
These numbers took some of the trade by surprise because the 1994 U.S. farm program allows farmers to plant 100 percent of their established acres (called “base” acres) for cereal and corn crops this year.
Winter wheat acreage, pegged at 50.6 million acres, is down just two percent from 1993, but is the lowest it’s been since 1988 — when farmers were required to idle 27.5 percent of their wheat base.
“We’ve got a zero set-aside on corn, sorghum, barley, oats and wheat. It’s incredible that we’ve got a reduction in everything but corn,” said Dick Loewy, president of Ag Resource in Chicago, Ill. “We’ve got no slack on adverse weather in the spring or the summer.”
Lots of soybeans
Prior to the report, analysts had predicted corn could top 80 million acres, and again were mildly surprised by farmers’ intentions to plant just 78.6 million acres.
However, farmers did fool the trade by saying they’re going to plant 61.1 million acres of soybeans, more than was expected. As a result, soybean prices took a tumble after the Easter holiday. Lower prices and the friendly fundamentals for corn could mean farmers switch some of those bean acres back to corn.
Stocks of corn are sitting at 3.959 billion bushels, down 41 percent from the same time last year, while wheat stocks are at 1.017 billion bushels, down 29 percent.
Loewy said May or July oats futures prices in Chicago could rally to $2 per bushel (U.S.) based on USDA’s report.
Mike Jubinville, a market analyst with United Grain Growers in Winnipeg, said the American winter wheat crop is not rosy either.
A winter of freezing and thawing could cause Midwest soft red winter wheat growers to abandon some of the crop. The trade is also watching the hard red winter wheat crop in southern Kansas and Oklahoma, where dry weather is starting to have an adverse affect on the crop.
“The bench mark has been set,” he said. “The key determining factor now is going to be the weather.”
