Planting Intentions Report

Tomorrow's the big day.  Here is the discussion at Wallace's Farmer:

A nationwide survey of 1,400 farmers spring planting intentions by Farm Futures Magazine projects 2011 corn acreage at 91.4 million acres nationally, up from 88 million last year but short of the 5 million more acres that grain market analysts say are needed to help rebuild tight U.S. corn stocks. Informa Economics has put its projection at 91.8 million acres and Goldman Sachs, a heavy investor in commodities, has pegged this year's corn planted acreage at 92.1 million acres.

Bob Wisner, retired Iowa State University Extension grain marketing economist, has some thoughts on this topic. His projection for corn is around 91.5 million planted acres in the U.S. in 2011. That's what he projects to be planted. That's a shade below Informa's estimate but a little higher than the Allendale estimate. Informa and Allendale are leading private forecasting and marketing firms.

"I think the big question is where are we going to end up with soybean acres?" says Wisner. "Market prices have been signaling to farmers that corn looks better than soybeans as far as return over variable cost is concerned. And that hasn't changed much from late February to where we are today. If anything, beans have gained just slightly on corn in terms of return over variable cost."

The markets will be more interesting than usual tomorrow.  We'll see if it is buy the rumor, sell the news, or if the USDA really surprises one way or the other.  Cotton should figure in pretty significantly.

Update:  This doesn't make me feel any better:

ISU Extension climatologist Elwynn Taylor is projecting the possibility of a drought in 2011. That is, given the current status of a continuing strong La Nina, we could end up with a 2011 average U.S. corn yield that is way below the trendline. Taylor's worst case scenario is a 148 bu. per acre for a U.S. corn yield average in 2011.

"With that low of a yield, we would likely redefine the term 'explosive' prices for crops," says Wisner. "Of course we don't know what the upside price potential might be, given high petroleum prices. On one hand that would tend to restrain meat demand and temper the livestock sector prices, as people spend more money on gasoline, leaving less to spend on meat and groceries. On the other hand, as petroleum prices go up it pulls up ethanol prices. So I would say we most likely in those scenarios would re-test and very possibly exceed the market highs in prices we saw in the spring of 2008, for both corn and soybeans."