On Monday, March 31, USDA will release two major reports out to the market at 11 a.m. CDT. The Prospective Plantings report and quarterly Grain Stocks report will serve to give a very early look into production potential for spring-planted crops, while also accounting for inventory still on hand from 2024.

PROSPECTIVE PLANTINGS

Perhaps no USDA release garners more speculation than the annual Prospective Plantings report, and as a result, the day also carries an increased chance of volatile price action. Over the past five releases, nearby corn futures have averaged 12-cent moves higher the day of the release, including a 16-cent gain following last year's bullish surprise, which estimated corn acres about 2 million acres lower than the average trade guess. For soybeans, the report has proven even more volatile, with a 72-cent gain following 2021's report and a 50-cent drop following 2022's report.

For Monday, the Dow Jones pre-report survey of 18 analysts is calling for 94.2 million acres (ma) of corn to be planted this spring, up from 90.6 ma in 2024 and in line with the 94 ma unveiled in the Ag Outlook Forum last month. For soybeans, 83.8 ma are expected. Again, this is in line with the USDA Outlook's early estimate. Much attention is given in the early months of the calendar year to the soybean-to-corn price ratio and its influence over planting decisions on the farm level. There is certainly historical correlation between a ratio smaller than 2.4-2.5 between November soybean and December corn futures and a shift away from soybean acres to corn acres. But I will also say that in the studies I've attempted, I have not been able to achieve above about 65% or so explanation in the variation of acres year-over-year from price ratio alone. This suggests that there are many more factors at play, most of which likely cannot be explained by statistical models and lie in the hands of the weather through spring and those operating the planters.

For wheat acreage on Monday, the Dow Jones survey is expecting 46.4 ma between all varieties, just over 300,000 more acres than in 2024. By category, the allocation is expected to be 33.9 ma of winter wheat, 10.5 ma of spring wheat, and 2.1 ma of durum. USDA estimated winter wheat acres at 34.1 ma in the January Seedings report, so there is expected to be a slight decrease there. Lastly, for cotton acres, the Dow Jones survey does not include analyst estimates, but USDA projected 2025 acreage at 10 ma during the February Outlook Forum. Also in February, the National Cotton Council of America estimated 2025 acreage at 9.6 ma, so depending on the forecast, an 11% to 14% decrease in cotton acreage from 2024 is expected due to lower demand and lower prices through the 2024-25 marketing year thus far.

GRAIN STOCKS

Also set to be released on Monday, the Grain Stocks report may be overshadowed this time around by the often more touted Plantings estimates. However, this report will offer the market a great deal of perspective on grain supplies in the U.S. as well as demand during the most recent quarter of the marketing season.

Corn demand continued strong through the second quarter of the marketing year -- December through February -- led by a very strong export pace. Based on weekly Foreign Agricultural Service (FAS) data, we can reasonably estimate exports during this quarter at north of 650 million bushels (mb), among the largest quarterly export performances on record if true. I also expect ethanol usage for the period to have amounted to approximately 1.370 billion bushels (bb) of corn. By far the most difficult category to estimate is feed and residual, primarily due to the tricky residual component. However, I have estimated based on historical usage patterns and the current USDA estimate for Grain Consuming Animal Units, that this category should account for around 1.6 bb of corn usage for the December-through-February period. All totaled, my personal demand estimate for the second quarter is 3.99 bb, leading to a March 1 stocks estimate of 8.02 bb of corn. For reference, the Dow Jones survey of analysts isn't quite as bullish, with the average estimate calling for 8.2 bb of corn stocks as of March 1. This still represents a 2% decline from 2024 and implies a usage over the second quarter that would stand as the second largest ever behind 2020-21 if true.

For soybeans, the Dow Jones survey is calling for a 2.7% increase in March 1 stocks to 1.895 bb in Monday's release. This implies a second-quarter disappearance for soybeans of 1.205 bb from 3.1 bb of stocks on Dec. 1, again one of the strongest demand figures for the second quarter if accurate. We know from weekly USDA-FAS data exports were likely near 590 mb over the period. Meanwhile, crush demand kept a record pace, which using NOPA data for February, we can estimate to have been 619 mb through the quarter. Similarly to corn, the tricky element of the equation to predict is seed and residual usage. Without getting into a long-winded explanation of historical USDA protocols for handling soybean residual usage, I'll just say it is common to see USDA make a correction in the second quarter for a typically stout seed and residual estimate in the first quarter. I see this being the case this season as well, as USDA estimated 193 mb of "unexplained" usage in September through November. I expect a revision downward to this figure to be reflected in Monday's estimates. For reference, all totaled, my personal estimates are calling for 1.19 bb of second-quarter soybean demand, and I am estimating a March 1 stocks figure slightly higher than the Dow Jones average at 1.912 bb.

Lastly, for wheat stocks, recall that the marketing year for wheat runs from June to May, so the period of interest for wheat is the third quarter. Dow Jones is estimating on average for there to be 1.22 bb of wheat stocks on hand as of March 1, a 12% increase over 2024 if true. This also implies a usage over the quarter of 350 mb. We know from FAS data that wheat export shipments over the quarter were likely to be near 165 mb. Wheat usage for food typically follows an alternating up-down-up pattern for the second through fourth quarters, and given the 249 mb used in the second quarter, an estimate of around 240 mb for the third quarter is a fair assumption. Like other commodities, though, we can expect a residual adjustment from USDA, which makes the Dow Jones estimates of both 1.22 bb of stocks and 350 mb of quarterly disappearance accurate, in my opinion, and in line with my expectations for Monday's report.

Join us for DTN's webinar at 12:30 p.m. CDT on Monday, March 31, as we discuss USDA's estimates of 2025 acreage and quarterly grain stocks, and what they may imply for the market moving forward. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Monday's Prospective Plantings and Grain Stocks reports webinar: https://ag.dtn.com/… .

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

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