On Tuesday, USDA did its best to provide a clearer picture of the supply and demand situation as we head into the 2026 planting season. We got the March 1 Grain Stocks report to help firm up old-crop consumption estimates and the invaluable first farmer survey of new-crop planting intentions. The latter report's reason for existence is to allow you to change your mind about the crops you are planting if you have too much company.

Unfortunately, due to circumstances, the outlook is about as clear as mud!

The potential impact of fertilizer and fuel prices on planting intentions is real, with corn requiring more of those inputs on a per-acre basis than soybeans. Most of the wheat was planted last fall and, thus, somewhat immune. As a result, we got positive price action across the grains on Tuesday, but no huge swings. Let's see if we can find a few diamonds in the mud -- or at least rubies or semi-precious stones!

Here's a quick recap of the Prospective Planting numbers. USDA shows 95.338 million acres for corn intentions, down 3.45 million from last year. Soybean acres are seen up 3.485 million acres from last year at 84.7 million. That's very close to a one-to-one switch and was very much expected because we really stretched crop rotations in favor of corn in 2025, and some soil types and local climates just don't handle corn-on-corn well. It was just a matter of degree.

Winter wheat was a winner on Tuesday, showing a drop to 32.41 million acres versus trade ideas of 32.7 ma or higher. Spring wheat and durum area plans were also smaller than traders in general expected.

Sorghum doesn't appear to be picking up ground from the lower wheat numbers, with the plantings survey showing only 6.12 million acres. Cotton showed more acres than anticipated (9.64 million), possibly due to spot futures hitting a four-month high during the survey period. Prices have continued to advance throughout March.

The new-crop soy-to-corn ratio was 2.39:1 at Tuesday's end. While the old rule of thumb was a 2.5 ratio drew more bean acres, recent history suggests 2.4 is the swing point, and it takes a ratio below 2.3 to get more corn. Given the stretch in corn acres in 2025 and this ratio, we're not likely to exceed the year-ago level. Thank you, Captain Obvious!

We assume more than 80% of the crop acres are committed via input purchases in winter and crop rotations. The market is jostling over the last 20%, and USDA's reliability disclosure for the report (page 34 if you are playing along at home) shows that over the past 20 years, the average corn change between March intentions and final plantings is 1.634 million acres, with soybeans at 1.868 million acres. The biggest swings in 20 years have been 6.5 million for corn and 8.5 million for beans.

It is not a zero-sum game, where you can only go up if another crop goes down. USDA reports 310 million principal crop acres in this report, the lowest since 2020. The total could suggest slight under-reporting or, alternatively, acres lost to concrete.

Were there any precious stones in the Grain Stocks report? Corn and wheat stocks were slightly tighter than the average trade guess, while soybean stocks were higher at 2.105 billion bushels (bb). I like to track corn stocks by region, which can shed some light on the needed basis. The Eastern Corn Belt (Ohio, Indiana, Illinois) March 1 stocks were up 4% versus a year ago. The strong export program hasn't helped that area much, with a second-quarter disappearance of 931 million bushels (mb) -- the poorest since 2020.

The Western Corn Belt (Iowa, Minnesota, Kansas, Nebraska and Missouri) appears to have benefited from strong ethanol grind as well as the outstanding export program year-to-date. The Dec-Feb implied disappearance for those states is a record 2.021 bb. That's a diamond! However, due to record production in 2025, the Western Corn Belt stocks on March 1 were still 10.8% larger than a year ago. We've been hearing complaints about the local cash bids not moving much. For the Western Corn Belt, this is the reason -- there is still plenty of corn to be had locally.

BOTTOM LINE

For corn, the wild cards haven't been played yet. Acreage could still be diminished by fertilizer and fuel costs. Yield could potentially be hurt by the rationing of expensive fertilizer or the ever-present drought concern and reversion to the mean after a record yield in 2025. The Grain Stocks numbers won't get us below 2-bb carryover, and that will be too comfortable once the market becomes satisfied that new-crop production will be there. Corn feed, seed and residual use still seems high based on animal numbers, but if USDA cuts old-crop production in June or September, it would typically reduce the residual use by a similar number.

Soybean prices have been consolidating since the March 13-16 price break. One shiny object we noticed for beans is that while March 1 stocks are 194 million bushels (mb) larger, on-farm inventories were only up 23.5 mb. The commercials have some cushion to feed, crush and export demand before they need to come back to the producer with any kind of urgency.

Alan Brugler may be reached at alanb@bruglermktg.com

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