USDA’s report on quarterly grain stocks coupled with the department’s prospective plantings report, both issued yesterday, will most likely result in higher corn prices over the next two months as the market tries to signal that more acres will need to be planted to corn this spring, according to a cross-section reading of reports from several agricultural commodity analysts.

Corn stocks in all positions as of March 1 were 6.52 billion bushels, a decrease of 15 percent from the inventory a year earlier and measurably below the pre-report average trade consensus of 6.69 billion bushels.  Farmers intend to plant 92.2 million acres of corn this year, according to USDA report yesterday, compared with the private analysts’ pre-report consensus of 91.7 million acres and last year’s planted acreage of 88.8 million acres.  At its outlook conference in early 2011, USDA estimated 92.0 million acres of corn would be planted.

“High corn prices have tried to limit demand to carry stocks over into next year, but this report says prices have not been high enough,” explained Dr. Chad Hart, agricultural economist at Iowa State University.  He predicted corn stocks remaining relatively low through the 2011-12 season with tight supplies likely to increase the seasonal average corn price 20 to 30 cents to $6.20-$6.30 per bushel.  Using 92.2 million acres of planted corn with an average yield of 161.7 bushels per acre and a 92- percent harvested acreage adjustment, Hart calculated a corn crop this fall of 13.54 billion bushels.  USDA currently estimates corn usage at 13.56 billion bushels.  “That says we can’t build stocks,” Hart added.

Ending stocks for the 2010-11 crop year could fall below the 5.0 percent stocks-to-use ratio level.  This would be the lowest ratio since USDA began tracking the numbers more than four decades ago.  In another report, ending corn stocks for this crop year could be “a mere” 575 million bushels, putting the stocks-to-use ratio at 4.2 percent, according to today’s edition of the “Daily Livestock Report” written by Steve Meyer and Len Steiner.  With crude oil prices over $100 per barrel, and with many, if not most, ethanol companies hedged on corn until the next corn harvest, “the ethanol market will remain strong and healthy,” according to Brian Hoops, an analyst with Midwest Market Solutions, as reported by Farm Journal Media.

Soybean stocks going forward in this crop year could also get tighter, Hart estimated.  Soybean stocks on March 1 in yesterday’s USDA report were 1.25 billion bushels, 2 percent under the level a year earlier.  Hart calculates that USDA’s 76.6 million acres of soybeans in the prospective plantings report adjusted for 98 percent being harvested with a yield average of 43.4 bushels per acre will result in soybean harvest this fall of 3.27 billion bushels.  The pre-report consensus for soybeans was 77.0 million acres and last year 77.4 million acres of soybeans were planted.  At USDA’s agricultural outlook conference, department analysts estimated that 78.0 million acres of soybeans would be planted.

At the outlook conference USDA also forecast that an additional 9.8 million acres will be planted to crops this year.  Many private analysts expect the increase to be about one-half that amount.  USDA will publish the actual planted acres for the various crops on June 30.