The USDA releases the Prospective Plantings report once a year at the end of March. The report is sometimes referred to as the Planting Intentions report. It is based on a survey the USDA conducts with farmers around the country on how many acres they expect to plant of each crop. This gives us a good expectation of how big each crop might be for the year. Of course, the farmers still have to plant and grow the crops.
The Prospective Plantings report is widely used by commodities traders to find data on corn, soybeans, wheat and cotton. The report does include more crops than the ones traded on commodity exchanges in the U.S.
This is a list of crops contained in the report: corn, all wheat, winter wheat, durum wheat, other spring wheat, oats, barley, flaxseed, cotton, rice by length of grain classes, all sorghum, sweet potatoes, dry edible beans, soybeans, sunflower, peanuts, and sugarbeets; acreage for harvest of oats, hay, and tobacco.
The report breaks the acreage numbers down by state. The USDA also includes a summary of each crop and highlights of weather conditions. This report is widely followed by commodity traders each year and it often set the tone for grain prices for the season.
Key Elements of the Prospective Plantings ReportThe most important part of the report is the amount of acres that farmers expect to be planted for each commodity. A lower number of acres is usually good for prices moving higher. You can compare the numbers to the previous 5 years, but it is most important to see how the acreage numbers compare to the estimates of market analysts.
If an acreage number comes in lower than what the market consensus was prior to the report, that commodity will probably rally higher. The more substantial it is below expectations, the stronger the rally to be expected. It works just the opposite if the number comes well above expectations – the market will probably drop.
This report sets the tone for the season of trading in the grains and cotton. Then, it will be up to the farmers to actually plant that number of acres during the season. Things can and do change. The USDA releases more concrete acreage numbers in June. After the crops are planted, all eyes are on the weather.
Here is a direct link to the USDA website where the Prospective Plantings report is updated: http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1136.