The following is a quick analysis of the USDA Prospective Plantings report from Renewable Fuels Association Vice President of Research and Analysis Geoff Cooper. Cooper will be hosting a webinar on the report and the role of ethanol in food prices this morning at 10:00 a.m. Eastern. To RSVP for the webinar, please email Taryn Morgan at tmorgan@ethanolrfa.org. 

The U.S. Department of Agriculture (USDA) released its annual Prospective Plantings report this morning, showing U.S. farmers intend to plant 92.2 million acres of corn, 76.6 million acres of soybeans and 58 million acres of wheat this year. The corn and wheat numbers are higher than the trade expected, while the soybean number is slightly below the average trade estimate. Corn and wheat plantings would be above 2010 levels, while soybeans would be slightly below.

Based on this acreage estimate, corn yields would need to average 159.7 bushels per acre to maintain current carry-out levels. To increase carry-out stocks to near one billion bushels, an average yield of 163.5 bushels per acre would be needed. Such a yield is entirely possible and in line with trend yield growth from the last 15 years. In 2009, American farmers set the all-time yield record at 164.7 bushels per acre.

This morning's acreage estimate clearly shows that American farmers respond to signals from the marketplace. There is every expectation that farmers will once again produce the corn that is needed to meet all demands.

USDA also released its report on grain stocks. Corn stocks in all positions stood at 6.52 billion bushels, below what traders expected. The slight drop likely reflects stronger than anticipated demand from livestock. Ethanol production through the first three months of the year has remained relatively steady at 900,000 barrels per day, or 13.78 billion gallons annualized.