Episode 38 March 31st Prospective Plantings and Price Implications for Corn and Soybeans

 In this episode of Morning Coffee and Ag Markets, Riley and Scott dive deep into the USDA's March 31 Prospective Plantings report and its price implications for corn and soybeans. They break down the anticipated 95.3 million acres of corn—4.7 million more than last year—marking the highest U.S. corn acreage since 2013. This surge, however, puts downward pressure on corn prices, especially with a potential record crop in 2025. Meanwhile, soybean acreage is set to decline to its lowest level in five years, potentially tightening supplies and driving prices higher. Tune in as they analyze these trends and explore what they mean for farmers and the broader market. 

Transcript

00;00;06;28 - 00;00;37;11
Riley Smith
Now we're recording. Take 2 or 3. I guess it’s three. Mercy. Well, we’ll, we'll just roll right into. Good morning. Good morning. Welcome to another episode of Morning Coffee and Ag Markets with your host, Riley Smith. And today we got Mr. Scott Stiles on a zoom call. And we're going to be talking about March 31st, perspective plantings and price implications for corn and soybeans.

00;00;37;13 - 00;00;38;26
Riley Smith
Mr. Scott, how are you doing today?

00;00;38;27 - 00;00;42;06
Scott Stiles
Doing Well, Riley, watching it rain.

00;00;42;08 - 00;01;03;22
Riley Smith
Now that watching it rain finally doing good. We got Mic’s. We, had a little technical error. We had to restart. We, have already been through this once, but we had a little mic. A little mic, Issue. So we got it swapped over, and then we finally got on the right zoom. So we're. Here we are. But, Mr. Scott, you're going to be talking about us.

00;01;03;22 - 00;01;19;19
Riley Smith
Planted acres, and then us corn and soybean. Supply and demand, I believe. And, I'm just going to let you kind of take that over and, discuss that. And, see where that goes. So that's.

00;01;19;19 - 00;01;50;03
Scott Stiles
Good Riley as you mentioned. Monday, March 31st, we got our, annual March perspective plantings number. And just to, recap that, the numbers didn't show any major surprises. The ahead of the report to industry felt like that we'd see a pretty significant jump. And in Corn Acres. And that's exactly what, what we saw on Monday's report.

00;01;50;06 - 00;02;24;26
Scott Stiles
Arkansas will follow that same trend. But, nationally, they're projecting, total corn acres of 95.3 million. That's up 4.7 million from last year. So pretty sizable jump and a pretty, pretty big total historically. That's the third as US corn acres since 1944 and the highest since 2013. So big jump there and then Arkansas followed that that same path.

00;02;24;28 - 00;02;51;28
Scott Stiles
We had a half a million acres of corn in the state last year. We're projected to see that go up to 710,000. So, so up a little, you know, up 210,000 from last year. The 700 or the 710,000 for Arkansas was really in line with the five year average, really for the state. So it seemed like a big jump.

00;02;51;28 - 00;03;19;13
Scott Stiles
But it really does. It puts us back to more of a normal level. We had a lot of prevented planting corn acres in the state. We had over just over 200,000 prevented planning, corn acres last year. A lot of that was in the South half of the state. And so things are the corn acres really just kind of getting back to more of an average level for at least for Arkansas.

00;03;19;15 - 00;03;48;18
Scott Stiles
So where the corn, picked up acres from, nationally and in the US, corn picked up acres from soybeans and cotton, you U.S. bean acres are projected to be down about 3.5 million from from last year. And cotton, should lose about 1.3 million acres from last year. So a pretty, pretty sizable move down in Cotton Acres.

00;03;48;18 - 00;04;17;22
Scott Stiles
That's the lowest, at 9.8 million cotton acres for the US. That's the lowest since 2015. So, I think as we've talked about a lot of times, Riley you know, the cotton prices just really hadn't, hadn't follow along, with corn. And so the, you know, the economics of cotton largely, you know, stay in this winter below $0.70.

00;04;17;22 - 00;04;48;22
Scott Stiles
It just it didn't look attractive. And so that was another reason that that we saw this big shift in and acres, corn really made I feel like a, you know, a more aggressive bid for acres price wise. It, and you go back to early December, we really kind of we started seeing a rally and new crop prices began there that moved about $0.55 higher from early December.

00;04;48;22 - 00;05;14;25
Scott Stiles
Into the 20th of February. And that's where we're where prices peaked at that point. So corn really it you know, it had some when you look at the fundamentals were the balance sheets were tightening here in the US and in the world for corn. And it needed some acres and, and made a fairly aggressive bid this winter for for acres.

00;05;14;25 - 00;05;50;15
Scott Stiles
And growers responded to that. So, we hadn't talked about rice acres, but, we are you know, the numbers Monday's showed us down just a little bit more like 10,000 acres on a long grain and up 23,000 on medium grain in the state. So, I think, you know, the price outlook from USDA’s recent numbers that they put out in the Ag outlook Form seemed a little more friendly for medium grain.

00;05;50;17 - 00;06;25;21
Scott Stiles
It seemed like their outlook for the for the 25 crop, I think was $6.44 a bushel for medium grain, around $6.08 for long grain. So a little, better price outlook for medium given, tightening balance sheet, you know, tighter stocks year on year for medium grains. So a little more optimism I think there. And then seed availability issues weren't, you know, discussed about, about, you know, impact and medium grain either.

00;06;25;21 - 00;06;37;18
Scott Stiles
So, that might have been another, another thing that moved, you know, moved some more acres over to medium grain.

00;06;37;21 - 00;06;43;15
Riley Smith
Yeah. You were talking about the first thing that kind of stuck out to me was looking at the cotton.

00;06;43;17 - 00;06;46;19
Scott Stiles


00;06;46;22 - 00;07;20;15
Riley Smith
Planted acres, 2020, 2024 and 2025, down from 11.1 to 9.8 and you talked about the price, but we also looking, a few weeks ago when we were talking about me and Hunter, were had an episode discussing about, basically the breakeven price and the table that he had. And basically it was a profitability table, and it didn't show in all the counties in the state of Arkansas, just Arkansas alone.

00;07;20;18 - 00;07;51;28
Riley Smith
I think there was one table out of multiple of them that had three, profitable, I would say, breakeven prices or prices and Bush or, not bushels. But I pounds I guess, based on that, you know, economically, the, the cost of production for cotton when, went up extremely high along with the, the drop in price.

00;07;52;00 - 00;08;31;24
Riley Smith
And you did mention to that the expected I guess the expected forecast was that corn production would increase this year, even though the price is still sitting between that $3.60 and, or $3.30 to $4.60 range on the average farm price. But other than that, did you see, do you know, any kind of, I guess, talk or see anything that has to involve with the kind of the export, the tariffs, the tariff war we got going on that affecting the balance sheets at all?

00;08;31;26 - 00;08;58;06
Scott Stiles
It's, you know, looking at, you know, the market reaction today to the, to the tariff announcement, it's been really negative. So far, I saw some news, I think it's, we'll do future podcast on this, but I think the, the announcement yesterday was a, it was a 10% tariff, a blanket tariff on all trade partners.

00;08;58;08 - 00;09;28;27
Scott Stiles
And then some trade partners will see higher tariffs. And there were some specific, tariffs applied to products from India and Japan and South or South Korea that we can discuss at another time. But this morning the market reaction is really negative. Cotton's been down. I see the May contract’s down $0.03, 300 points or $0.03.

00;09;28;29 - 00;10;00;03
Scott Stiles
Rice is down $0.12 to $0.15. And so soybeans are down, you know, $0.15 to $0.16. So, but I will say the market reaction has been really modest. You know, there's not much market reaction in corn. And again, that points to, you know, the corn. And in total when you look at total demand, corn is not as export dependent as say cotton and soybeans.

00;10;00;06 - 00;10;36;27
Scott Stiles
And that's something we I think may of, you know, influence growers decisions is are thinking, you know, 40 you know, right around 43%-45% of soybean demand is, is exports. China is our biggest trading partner. So far, about half of our soybean sales have gone to one market, and that's China. Cotton's, even more so, they export dependent 80, 87% of our demand for cotton is exports.

00;10;36;29 - 00;11;02;15
Scott Stiles
And China's traditionally been, you know, a large trade partner. So these commodities that are very export dependent are our, you know, being most impacted by the by the tariff news corn. I see corn is even turning green a little bit, which we got the May and July corn's just about unchanged at this point. So, it's weather in the tariff news.

00;11;02;17 - 00;11;10;17
Scott Stiles
Better, than than cotton and soybeans. So far.

00;11;10;19 - 00;11;45;09
Scott Stiles
But, You talked about prices. I'm, go back and mentioned the the survey that that NASS, sent out for the perspective planning was done from, February 18th to March 18th, and we were, during that time, the December cotton, average, $0.6881 over the survey period compared to 0.8362 at the same time last year.

00;11;45;09 - 00;12;11;20
Scott Stiles
So that's a 18% drop year to year. And and the December contract during the survey. So at that 0.6881, you know, near 69 cent level, you talked about break evens. You know, we're for the average grower. You know at that price level, we're just I mean, we're right at it at three bale average. We're really close to it.

00;12;11;22 - 00;12;43;13
Scott Stiles
To make cotton just cover the variable cost. And so that's, we had those types of yields on a lot of farms last year, but doing it consistently is, is a huge challenge. So I think that was there was something in growers minds that they just didn't have any any. Excitement about the prices. The prices didn't seem profitable without some a repeat of last year's record yields.

00;12;43;15 - 00;12;53;11
Riley Smith
Now, I know we're talking about corn and soybeans, specifically, but I'm curious, do you know what may have influenced the medium grain rice to increase in planted acres over.

00;12;53;12 - 00;12;53;28
Riley Smith
Long grain,

00;12;53;29 - 00;13;25;16
Scott Stiles
Like we talked about, you know, the price outlook for medium? It was a little more optimistic. I think USDA projected a $6.44 a bushel, season average price for the 25 crops, compared to $6.08 for long grain. The balance sheets a lot in the stock situations, a lot heavier over the long grain. In 24, we saw medium grain acres decline a lot in Arkansas and California.

00;13;25;18 - 00;13;57;13
Scott Stiles
And that the medium grain stocks really have tightened up quite a bit over the past year. So I think a little more optimism on a medium grain price. I think like we mentioned, the seed availability. Not a concern when medium grain. So those two saying price outlook seed availability problem, two factors that drove some acres to medium grain.

00;13;57;15 - 00;14;07;17
Riley Smith
I was just curious if because, you know, the milling quality was was a big discussion that a lot of people had, we had our own theories on that.

00;14;07;17 - 00;14;08;24
Scott Stiles
Well,

00;14;08;26 - 00;14;22;15
Riley Smith
but I didn't know if that would include medium and long grain rice together, that their milling quality was down, or if it was just particularly long grain that had, had a milling problem, because that's what the.

00;14;22;15 - 00;14;24;22
Riley Smith
Majority of acres in Arkansas is

00;14;24;25 - 00;14;43;10
Scott Stiles
It’s not it's not really something I can speak to. Riley You know, milling seems to be more of an environmental issue that, you know, would probably affect both medium and long grain, but, that's out of my out of my league, so I couldn't say.

00;14;43;12 - 00;15;04;19
Riley Smith
We’re get or getting more, getting more into the, agronomy portion of it, which we are not. Anyway, but we'll move on. So we talked about corn, soybeans. You hit on a little bit. Is there anything else she's saying? As far as soybeans go?

00;15;04;19 - 00;15;34;04
Scott Stiles
Well, okay, you may have alluded to this, earlier, but, I thought we'd touch a little bit on the price outlook from here forward if, if the findings from the March perspective, plantings turn out to be true, if let's just say that we do actually, you know, get the weather that we need and, and get a, you know, cooperative weather during our planting window, this many corn acres do get planted.

00;15;34;06 - 00;16;06;15
Scott Stiles
If we get 95.3 million planted in the US, then growers need to think about what is the impact of that. If you're really optimistic and use the terrain yield, USDA is using, a trend yield of 181 bushels in their, 25 early 25 balance sheet. If we could if, if we could produce that, that level of yield.

00;16;06;15 - 00;16;36;23
Scott Stiles
And we'd also produce a record corn crop where these acres and that is, fundamentally bearish long term for the corn market. That would definitely move ending stocks back up above 2.1 billion bushels. So that's something to keep in mind in your marketing decisions. Is that that a lot of, you know, a lot of marketing decisions probably need to be made in the in the first six months of this year.

00;16;36;26 - 00;17;05;28
Scott Stiles
But we just need to follow how how, well, the planting, planting progress goes, and whether this many corn acres are going to get planted. If they do, then it's, it's long term bearish for corn. It's just the opposite, scenario for beans. If Bean Acres do drop down to 83.5, then we could see the bean balance sheet tighten up quite a bit.

00;17;06;01 - 00;17;37;16
Scott Stiles
If you had a trend yield USDA’s using 52.5, which seems, you know, that's aggressive. That's you know, that's a pretty optimistic yield. But even if you had that have a yield. We see beans stocks, bean stocks go below 300 million down to 294 million bushel. So it's you know, that's quite a bit tighter than last year's 380, 380 million carryout.

00;17;37;18 - 00;18;09;01
Scott Stiles
So in that sense, you know the I think you could be a little bit more optimistic about about bean prices. As we go through the go. So the 25 crop year, so that's that's my take on it Riley, is if we see deep reproduction in Bean Acres, I think there's better prices ahead. It's just really difficult to say, you know, when the kind of an uncertain trade environment that we're,

00;18;09;04 - 00;18;22;18
Scott Stiles
But but, from an acreage standpoint, yeah, it looks like bean balance sheet could tighten up quite a bit. This year for 25.

00;18;22;21 - 00;18;43;24
Riley Smith
And that would just make sense because of the increased acreage, planted corn. I mean, this is just common, common, common supply and demand. If we, increase the supply of corn, I mean, and lower the supply beans, then, it should drive that demand for beans up a little bit more, which should increase price a little bit.

00;18;43;24 - 00;18;44;07
Riley Smith
Well.

00;18;44;09 - 00;19;08;21
Scott Stiles
You know, it's the acres. It's it's the huge could and bean acres that I think that could, could tighten the balance sheet up quite a bit. There's I think late as of late, you know, there's optimism on, the, biofuels front, perhaps, that we could continue to see, you know, get crushed. Demand for the 25 bean crop.

00;19;08;23 - 00;19;25;24
Scott Stiles
The big question mark is the export demand. Brazil's finishing up harvest on a I a record bean crop. They're going to be real competitive, for the, you know, for much of the the remainder of this year.

00;19;25;26 - 00;19;27;22
Scott Stiles
So

00;19;27;24 - 00;19;37;04
Riley Smith
And they still and they still showed that here on the balance sheet. I mean, they still show the projection for 2526 and exports, you know, we still increase from 182.5 and 186.5.

00;19;37;12 - 00;19;39;04
Scott Stiles
And it's yeah,

00;19;39;04 - 00;19;54;25
Riley Smith
On beans. So I mean, we're still increasing. I think corn was 12 six. They increased it to. No. Yes, yes. No, I think it's 22, 2450.

00;19;54;28 - 00;19;57;18
Riley Smith
Right. And then we, we decreased to 24.

00;19;57;19 - 00;20;07;23
Scott Stiles
And not a big change in corn exports. But you know it's down 50 million and USDA's outlook. So.

00;20;07;25 - 00;20;17;19
Riley Smith
Right. So but anyway, Mr. Scott, believe is there anything you want to wrap up? No.

00;20;17;21 - 00;20;43;00
Scott Stiles
I just, I think, you know, we've we've had a really nice march. We got, in our planting progress on, corn, soybeans and rice is ahead of average, but, unfortunately, I think we may, may kind of say that to certain, at these current levels for a while this week, it's really wet. Next week, it'll take a lot of time to dry out.

00;20;43;05 - 00;20;54;00
Scott Stiles
And, so we may lose about two weeks here, without seeing much progress here in the state on planting, so.

00;20;54;03 - 00;21;17;12
Riley Smith
Right. And in the eastern Arkansas, they were unfortunately, they got hit pretty hard last night by the tornadoes, Lake city got smoked and, I hope everybody's okay over there, but that, that definitely is going to affect the farming ground. And, I would assume that we'll probably see a lot of.

00;21;17;14 - 00;21;19;09
Riley Smith
Not pre-plant,

00;21;19;11 - 00;21;20;01
Scott Stiles
Some replanting?

00;21;20;01 - 00;21;20;21
Riley Smith
Yeah some replant.

00;21;20;21 - 00;21;37;02
Scott Stiles
I see this morning. Lower ends of the fields are under water, and maybe, you know, I don't know, like you said. And we may lose some, lose some, acres on some in some areas. If they stay full.

00;21;37;05 - 00;21;56;12
Riley Smith
Like like I talked about earlier, though, I mean, oh, before we started recording and we went from one extreme to the next, I mean, where the, the whole basically nearly the whole state of Arkansas, I believe it was the whole state of Arkansas was under a burn ban, went from a burn ban to now there's water standing everywhere.

00;21;56;15 - 00;22;16;03
Riley Smith
Yep. So maybe that ground or maybe that ground will absorb the moisture really quick and then, they can take off from there. Yeah. But anyway, Mr. Scott, I appreciate you taking the time, sir. Jumping on here to, give us a recap, I wish I had another saying last week. We did one on the ecap

00;22;16;03 - 00;22;50;13
Riley Smith
And so Hunter had a little twist on it/ A recap of the ecap, but, recap of the March 31st perspective plantings. And, I think we did a pretty good job, doing the price outlook or overview over the, price implications for corn and soybeans as well. So if, for our growers listening, you know, take with a grain of salt, but marketing this year is probably going to be, everybody already knows that farming at this moment has been, been quite the challenge.

00;22;50;15 - 00;23;10;16
Riley Smith
So, I know that a lot of producers are probably already looking ahead at what to do with their, their, their future crop. So but if you haven’t it probably needed to start, start working on that. Anyway, Mr. Scott, appreciate it again. Sorry I'm rambling on here a little bit, but, Yeah. Great.

00;23;10;16 - 00;23;14;09
Scott Stiles
Thanks for having me on Riley. Thank you.

00;23;14;12 - 00;23;39;23
Riley Smith
Yes sir, well, everybody stay tuned for my market report. Thanks. All right, guys, back with your market report May 25. Corn current prices at $4.60 per bushel. Months agos was at prices at $4.52 per bushel. That's up $0.08 and a year agos prices at $4.34 per bushel. That's up $0.26. May 25 Rice Current prices at $13.08 per cwt, month agos price is at $13.57 per cwt.

00;23;39;23 - 00;24;07;06
Riley Smith
That's down $0.49. And year agos price is at $16.16 per cwt. This down $3.08. May 25. Soybeans current price is at $9.77 per bushel. Month agos price was at $9.99 per bushel. That's down $0.22. And year agos price was at $11.85 per bushel thats down $2.08. July 25 wheat. Current price is at $5.43 per bushel. Months ago price is at $5.51 per bushel.

00;24;07;06 - 00;24;34;17
Riley Smith
That's down $0.08 and a year ago price was at $5.82 per bushel. That's down $0.39. May 25 Cotton current price is at $0.63 per pound a month ago prices at $0.63 per pound. There's no change. Year agos price is at $0.86 per pound. That's down $0.23 and your weekly U.S average peanuts. Current prices at $464 per ton a month agos prices at $508 per ton, that's down $44 and a year ago prices at $512 per ton.

00;24;34;24 - 00;24;59;17
Riley Smith
That's down $48. And that's your weekly commodity futures this week. Your fertilizer prices this week. There's no change from the previous week. Urea is still at $539.75 per ton, ammonium nitrate at $494 and 70 $0.67 per ton. Excuse me, ammonium sulfates at $539.80 per ton, and DAP is at $759 per ton. Triple Super phosphates at $665 per ton.

00;24;59;20 - 00;25;24;27
Riley Smith
Potash is at $452 per ton. AG Lime is $50 per ton and pellet lime this week at $237.65 per ton, your diesel prices this week off-road diesel $2.62 per gallon, highway diesel $3.30 per gallon, and your Mississippi River level at Memphis, Tennessee this week. Current levels at 9.95 and year ago was at 5.05ft. Want to thank you all again for tuning in to another episode of Morning Coffee and Ag Markets.

00;25;24;27 - 00;25;31;06
Riley Smith
We hope you enjoyed it. Enjoyed your morning coffee as you tuned into another episode. So until next week we'll get you all on flip flop.

00;25;31;11 - 00;25;47;15
Riley Smith
Bye bye now.