RPT-COLUMN-USDA's 'March Madness' will be no slam dunk for grain analysts: Braun

By Karen Braun

NAPERVILLE, Illinois, March 26 (Reuters) - The drama is upon us.

We're not talking about college basketball, but rather the incoming U.S. grain stocks and acreage data that is just as notorious for "upsets" to the general consensus.

Although it is the most hotly discussed item set to appear in Monday’s reports from the U.S. Department of Agriculture, U.S. corn planting intentions have without a doubt been the most difficult to predict in recent years.

But analysts’ ideas on March 1 corn and soybean stocks are alarmingly narrow, which could ultimately reveal that the market is off base on its recent supply assumptions.

This means that both corn acres and quarterly stocks must be put on notice for possible surprises.

STOCKS

On average, analysts peg U.S. March 1 corn stocks at 8.151 billion bushels, down 2.4% from last year. The estimates sit in a 261-million-bushel range, which is the smallest for this report since 2009.

In fact, that range is about half the average size of the last five years, greatly increasing the possibility of a miss. The last time March 1 corn stocks fell outside the range of guesses was 2018, though they did remain in-bounds in 2009.

March 1 corn stocks have landed below the average trade guess for five consecutive years now. But analysts have been too conservative on soybean stocks in seven of the last eight Marches (not 2023).

March 1 soybean stocks are seen at 1.901 billion bushels, up 3% on the year. The 192 million-bushel cushion in the estimates is also very narrow, the smallest since 2016.

However, March 1 soybean stocks have not missed the estimate range since 2013.

USDA in January slashed both the 2024 U.S. corn and soybean harvest estimates. Some market participants felt this was too extreme, and that the extra supply could be unexpectedly ‘found’ again in future quarterly stock surveys, particularly for corn.

However, there is no evidence that a shrinking corn crop necessarily leads to bearish outcomes in subsequent stock reports.

CORN ACRES

On average, the trade expects 2025 U.S. corn plantings at 94.361 million acres, up 4.2% on the year and slightly above USDA’s month-ago target of 94 million.

Analysts have given themselves a wider-than-normal range of estimates at 4.1 million acres, with a high of 96.6 million.

This could come in handy because March corn intentions have missed or nearly missed the range of trade estimates in eight of the last nine years. Six were complete misses, though corn acres landed on the ends of the ranges in both 2023 and 2024.

It has been a decade since March corn acres have come within less than 1% of the average trade guess, meaning the market frequently misses by more than a million acres.

Bulls won’t like this nugget. Over the last two decades, March corn acres have never landed below the average trade guess when the new-crop Chicago soybean-corn futures ratio averaged 2.3 or below during February. This year notched a corn-favoring 2.24.

Bearish March corn acres are also more common when estimates for the previous corn harvest shrank as they did this year.

But sometimes trends are made to be broken, so is 2025 sufficiently unique? That is unclear, though the acreage pool is limited as farmland has been lost to development over the last decade-plus.

Also, new-crop corn prices so far this year have averaged below the breakeven costs that USDA forecast last autumn, which was not the case in most recent years.

But corn profitability prospects still look much better relative to soybeans. Analysts expect U.S. farmers will plant 83.762 million soybean acres in 2025, down 3.8% on the year.

That is the biggest year-on-year decline in soy acres that the trade has predicted in March since 2007, emphasizing the bleak sentiment around the oilseed.

March soybean acres last missed the range of trade estimates in 2018, though if anything, the bias could be for bean plantings to be friendly on Monday. Soybean intentions came in higher than the average trade guess only three times in the last 16 years (2022, 2017, 2014).

Both CBOT corn and soybean futures have drifted lower over the past several sessions. But if grain traders' so-called brackets were to be busted on Monday, prices could make a quick U-turn – or be sent further off the cliff.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.