COLUMN-Hall of Shame? Revisiting four major doozies in US acres, stocks: Braun

By Karen Braun

NAPERVILLE, Illinois, March 27 (Reuters) - It’s no secret that the data put out by the U.S. Department of Agriculture each year at the end of March can have serious ramifications for the market due to its unpredictable nature.

In fact, industry analysts have been in the ballpark with U.S. corn plantings on maybe two occasions within the last decade.

Since March acres and stocks have been misjudged so often, many instances make for great discussion.

But just for fun, let’s review four of the worst March misses in recent years because a good lesson can be gleaned in most cases.

CORN ACRES, 2016

Average trade estimate: 89.97 million acres; high of 91 million

USDA actual: 93.6 million acres

In March 2016, the market learned that U.S. farmers love to plant corn, especially when new-crop futures prices heavily favor the yellow grain in opening months of the year.

USDA’s June survey reiterated this lesson, as the trade once again low-balled corn acres. New-crop futures had swung heavily toward a bean-favoring position during the spring. But springtime weather was favorable for corn planting, and farmers did just that.

Analysts’3.9% miss on 2016 corn intentions remains the largest of the last two decades.

CORN STOCKS, 2013

Average trade estimate: 5.01 billion bushels; high of 5.25 billion

USDA actual: 5.4 billion bushels

In March 2013, the market learned that excessively high prices kill off demand. The 2012-13 U.S. corn harvest was decimated by historic drought, and Chicago corn prices reached all-time highs in August 2012.

Crop losses were captured early, as final production was extremely close to what was projected in August.

U.S. corn exports suffered the most in 2012-13, the final volume falling 44% from the August prediction. In this case, both the market and USDA learned that U.S. corn is more replaceable than previously assumed.

In 2011-12, combined corn output in Argentina, Brazil and Ukraine had jumped 24% on the year and exports surged 91%.

The trade’s 7.1% miss on March 1, 2013 corn stocks remains by far the heaviest March corn stocks miss of the last two decades, more than double that of the runner-up.

CORN AND SOY ACRES, 2021

Average trade guesses: 93.21 million corn acres, low of 92 million; 90 million soybean acres, low of 86.1 million

USDA actuals: 91.14 million corn and 87.6 million soybean acres

In March 2021, the market learned about acreage limitations. Crop prices reached multi-year highs in early 2021, and U.S. farmers were expected to go gangbusters, planting fence-row-to-fence-row, even in ditches.

The trade wanted 183.2 million combined bean and corn acres in March 2021, though the figure landed at 178.7 million. Analysts were somewhat vindicated down the road when final acreage notched 180.1 million, just shy of 2017’s record.

However, combined March acreage estimates have been more tempered ever since as the market has been more accepting of the shrinking U.S. acreage pool.

The 2.7% miss on March 2021 soybean acres remains analysts’ worst since 2009.

CORN ACRES, 2020

Average trade guess: 94.33 million acres with a high of 96.4 million

USDA actual: 96.99 million acres

In March 2020, the market learned that if both corn and bean prices are poor, farmers are likely to opt for corn. However, 2020 also demonstrated that U.S. farmers’ love for corn has a limit.

U.S. farmers’ March 2020 plans of planting the largest corn area in eight years went out the window with the onset of the pandemic, which sent new-crop corn prices to 14-year spring lows.

This was one of the only provable cases where a shift in prices during the spring materially impacted corn acreage plans, and this was revealed in the June survey. Farmers scrapped nearly 10 million planned crop acres in 2020 amid the plunge in prices and economic chaos.

There are some parallels between 2020 and 2025, for one, the relative attractiveness of corn versus soybeans. The average trade guesses and ranges on corn acres are nearly identical, and some current corn acreage estimates reflect 13-year highs.

However, the strong corn 2025 area could be placed on notice if prices take a notable downturn over the next few weeks, particularly if it is macroeconomic-related, as this introduces considerable uncertainties.

U.S. tariff threats and recent global economic concerns increase the odds of such a situation in 2025.

But unless it is severe enough, the default lesson learned from this study should be kept close: U.S. farmers really, really like planting corn.

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