Farmers Refuse USDA Surveys, but Big Ag has the Data and is Using it Against Them

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Futures and options trading involves risk of loss and is not suitable for everyone.

🌽 US farmers are slashing corn plantings by 3.5% as the Iran war chokes off fertilizer supplies — but the USDA's own data may be nearly worthless with a record-low survey response rate of just 37.6%! Soybean acres are actually rising 4.3%, and grain stocks are up big—so the full picture is more complicated than the headlines suggest.

🌾 US wheat acreage is crashing to its lowest level since 1919, with spring wheat hitting a shocking 56-year low! Dry weather hammering Kansas HRW wheat regions and tightening supply forecasts are sending futures flying—watch this space closely.

🛢️ Oil had a wild March, surging a massive 51%—its biggest monthly gain since 2020—but pulled back 1.5% Tuesday as Trump hinted at a US withdrawal from Iran within weeks! Even if peace comes fast, experts warn it could take months for oil shipments to normalize due to heavy infrastructure damage.

🤝 The high-stakes Trump-Xi summit is still happening, now locked in for May 14–15 in Beijing despite the Iran conflict throwing a wrench in global diplomacy! China has been buying US soybeans at a modest pace this year but has yet to commit to the massive new-crop purchases that were rumored.

🚢 The world is scrambling to reopen the Strait of Hormuz to fertilizer shipments in a humanitarian deal modeled after the famous Black Sea grain corridor! With fertilizer flows blocked, global food prices are under serious pressure — and the stakes for food security worldwide couldn't be higher.

Transcript

No Jokes

SPEAKER_01 0:08

Good morning, everybody. It's Wednesday, April 1st, 5 24 a.m. Central Time grain markets are lower this morning. May corn futures down four and three quarters at 453. May soybeans down five and a half cents at 1165 and a half. May Chicago wheat down 12.5 at 603 and three quarters. May Kansas City wheat down 15.5 cents at 620. May Spring wheat down six and a quarter at 652 and a quarter. Mackenzie, it's April Fool's Day.

SPEAKER_00 0:33

Oh, it is. That's right.

SPEAKER_01 0:35

I have an Arizona basketball t-shirt. Oh the reason that I have it is because I ordered a bunch of shirts from someplace and like they sent me like a bonus shirt.

unknown 0:45

Okay.

USDA, Big Ag, Data, Farmers

SPEAKER_01 0:50

Because people, I think people would like like lose their minds at six in the morning. I didn't I didn't want to disturb them like that, you know. Have people start off their morning peacefully. Um, anyways, so no, no April Fool's jokes from us. Uh, we had a big USDA report yesterday. Why don't we start there?

SPEAKER_00 1:05

Yep. So based on surveys completed in early March, U.S. farmers intend to plant 95.34 million acres of corn this season, down 3.5% from last year. Soybean acres are estimated at 84.7 million, up 4.3%. In its separate quarterly green stocks report, the USDA reported U.S. corn stocks at 9.02 billion bushels on March 1st, up 11% versus last season. And then soybean stocks were reported at 2.11 billion bushels, up 10%. Keep in mind, yesterday's report likely does not fully capture the impact of the war.

Acres and Stocks

US Wheat Acres and Weather

SPEAKER_01 1:39

Okay. Before I regurgitate the USDA numbers and tell you what they do or don't mean, let's look at this. The response rate for this survey was 37.6%, 44.3% last year. This was the lowest farmer farmer survey response rate on record. And I get the idea of what you guys are doing here. You don't want to give USDA your data. It's your data. You own it, whatever. Let's look at how this plays out statistically. I did a little bit of research this morning. This is in regard to corn acreage. Assuming the respondents are perfectly accurate, the pure sampling margin is only about 560,000 acres. But the non-response bias risk is far larger. A mere 5% behavioral difference between responders and non-responders swings the true number by roughly 2.8 million acres, and a 10% divergence would mean the real acreage could be anywhere from 89.7 million to 101 million acres. That's a massive range for a market moving type number. So we didn't learn anything yesterday because farmers don't respond to the surveys. And I I get why. I understand why, but let me tell you this. You guys are giving USDA nothing, which equates to garbage, which means the reports are not accurate, right? I'll tell you who is getting the data. It's big ag companies. I'm going to read you guys something. Every major ag company is collecting your data. Equipment dealers, seed companies, fertilizer retailers, all of them have data platforms pulling from your fields, and collection is usually on by default the moment you start the machine. What they're collecting is deeply sensitive. Yield maps, planting rates, input types, and amounts, soil data, field boundaries, harvest timing, essentially a detailed financial and operational profile of your farm. It's being used for more than just your benefit. Companies are used using this data internally as a sales engine. It can also give commodity traders early market intelligence, knowing things before you do. And we have reason to believe that some of this data is in fact being sold to trading firms. There is no federal law protecting farm data. Contracts are long, complex, and largely take it or leave it. One egg attorney compared it to a cell phone agreement, agree to whatever Apple said, or you can't use your phone, no data, police, nothing. So you guys know this. You guys know this. But the the problem is that so you're giving USDA nothing, and therefore the public, which is you guys, know nothing about this acreage situation, all this stuff. That's why the reports have been so bad. But the big ag companies know. And I think they're using it against you. I think they're using it against you. I think they're using it against you with regard to the way that they price things, with the way that they sell things. I think that there is data being sold. It's not being sold to you, it's being sold to people with deep pockets who want to know what's going on in the markets. So I'm not telling you what to do with the surveys. Respond to them, don't respond to them. I don't care. It's not, it's, I mean, it is my livelihood, but it's not. So, I mean, do what you want. But I think that's I think you got to think about that. Okay, let's go to the acres. Uh, 95.3 million acres of corn that was uh above the average trade guess, but below last year. Looking at uh general principal crop acres here, who were the big winners and losers? Canola picked up a whole bunch of acres, sunflowers, soybeans picked up some acres, cotton actually picked up some acres, and then the big losers would be uh rice, peanuts, durham wheat, dry edible beans, sorghum chickpeas, spring wheat lost a bunch of acres, corn lost a bunch of acres. Okay, here's corn acres down to 95.3. So you're off from last year. Is that a real number? No. Are any of these real numbers? No, they're not. We'll get a slightly better feel for it in June. Um, corn acreage declining in most major corn growing states. Uh, not a surprise. Soybean acreage increasing and increasing in most major soybean states, uh, going to cotton. Cotton was actually up year over year, and I think that was expected, but I think the cotton number was maybe a little bit bigger than the industry had expected. And then I've already showed you guys this one. So the acreage thing, I don't know. It's just like, hey, there were some numbers out, the market didn't show any drastic reaction. Like beans rallied a little bit, corn was kind of flat-ish. Um, but they're not real numbers. And maybe we'll know some more real numbers come June, but we don't know them right now. Grain stocks, uh, corn stocks were supportive, about 80 million bushels below the average trade guess. And this has some people believing now, maybe a little bit more so, that feed and residual number. Everybody thought the feed and residual number for corn was way too high. And now people are being forced to rethink that. Or USDA in the future, probably in September, they could go back and revise last year's crop lower. I don't know why this the stocks uh were down versus expectations, but it's it's a supportive item. We just don't know why. And USDA will clarify that at some point in the future. Uh so I mean stocks were kind of high highest since um, I think the 1920 marketing year. But again, the markets, the markets didn't react uh very strongly to any of this. It was kind of like, I'm not gonna call it a dud of a report, but not anything groundbreaking and no major surprises.

SPEAKER_00 6:36

U.S. wheat acreage is projected to fall to its lowest level since 1919. The USDA estimates total wheat acres at 43.78 million this season, below the average trade estimate, and down 3.4% from last year. Winter wheat acres are projected at 32.4 million, a two per 2.2% decline, while spring wheat is forecast at 9.4 million acres, down 5.8% from last year, and marking a 56-year low. The reduction in wheat acreage comes amid ample global supplies and softer demand for U.S. wheat. Wheat futures moved higher following the report, though the gains were likely driven more by ongoing U.S. weather concerns.

Oil, Iran, Stock Market

SPEAKER_01 7:17

Yeah, you got a couple of things going on here. So winter wheat acres down a little bit. I think there's, especially as it relates to the HRW uh market, we've got some crop issues we're gonna talk about here in a second. Spring wheat acres were down sharply and actually quite a bit below expectation. So spring wheat futures rallied yesterday and were lower this morning, but uh everything did look good for a moment in time yesterday. To go back to HRW wheat country, over the next 10 days, there's not gonna be a whole lot of rain. It's gonna miss to the east and to the north. Some HRW wheat growers are gonna see rain, but the vast majority of the crop in western Kansas, eastern Colorado, uh, that southwestern part of Nebraska into the uh Oklahoma, Texas panhandle area dry. And then, yeah, the GFS does introduce some rain during the 10 to 16 day period, but we've seen this before, and the rains have not materialized in the extended forecast. There is some rain on the radar, quite a bit of rain over the uh central corn belt, uh parts of Missouri, Iowa, Illinois, into Indiana, Ohio this morning. Um, I know that the rain is needed in a lot of these areas, not necessarily ideal timing given that a lot of people are gonna start or would like to be planting corn here in four or five days, but um, and it started already in the south for sure. But uh yeah, a little bit of rain on the radar this morning.

SPEAKER_00 8:28

Oil prices declined yesterday, with WTI crude falling one and a half percent to settle at 101.38 per barrel, as both Iran and the U.S. signaled openness to ending the war. President Trump said he expects U.S. military forces to withdraw from Iran within two to three weeks. However, even if the conflict ends soon, it will likely take months for oil shipments to return to normal due to extensive infrastructure damage. Despite yesterday's pullback, WTI crude rose roughly 51% in March, marking its largest monthly gain since May of 2020.

SPEAKER_01 9:02

Okay, we've shown you guys a whole bunch of crude charts and crude WTI futures still above 100 bucks this morning. So I think that there's two markets. I want to talk about the stock market for a second. We'll talk about crude first. I think that traders are trading actual crude oil fundamentals with regard to crude. They're trading the idea that, hey, even if the straight opens up, there's still going to be all sorts of supply backlogs and messy shipping stuff that we're gonna have to get through. The stock market is trading basically the headlines. And that's why the SP 500 was up 2.9% yesterday. That was the best um day for the stock market in months and months and months. Now we were still down 4.6% in the first quarter. That was a the worst quarter for any quarter in the SP 500 since uh Q2 of 2022. It actually kind of looks like a downside reversal bar on this quarterly chart. We're still up 16% over the past year, but the stock market had a big day yesterday and we're up another half a percentage point today. And this is all just because there's talk out there that this thing could de-escalate. So the stock market is more whimsical. It's just like kind of trading, you know, whatever the latest and greatest headline is. The crude oil market seems to be trading more like crude oil fundamentals. Like, hey, you know, this straight reopens, we're still gonna have some supply problems for a little bit.

SPEAKER_00 10:14

If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers why uh report day is a great day to be a subscriber?

Trump/Xi

SPEAKER_01 10:22

Great day because Joe sits and looks at the report, and then I get a video blasted out. I think I had it out within like eight minutes yesterday. Just a quick, like three-minute snapshot. Hey, here's what you need to know today. And then it's the following day. So this morning in our 5 a.m. email, we had all the details and analysis. Uh Shay was on last week and talked about what he's doing with AI for his farm. Lots of interesting little uh tools and dashboards that he's developing. There's there's a lot of potential here for this stuff to help you make your uh farming operation run a little bit smoother, just eliminate a lot of the mundane type tasks that you guys really hate doing. Brian Split is gonna be on running charts today, which should be super interesting. I think that um I think the wheat charts look really interesting. I think the corn chart looks interesting. I think even the soybean charts look interesting. Uh, much more exciting than it has been for months and months and months, given the uh price action that we've seen recently. If you guys want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a$50 per month subscription. You can cancel it anytime. There's no other fee, no other obligation, nobody will try to sell you anything else. We just blast out a ton of content that is geared toward the farm decision maker every single business day. If you do the marketing, if you buy the crop insurance, if you do the agronomy, if you do policy, if you do the taxes, um, this applies to you, and we've covered different topics every day. It's it's centered around grain marketing, but we cover almost every adjacent item that you guys should consider. Uh, give that deal a shot this morning, guys.

SPEAKER_00 11:44

The upcoming meeting between President Trump and Xi Jinping remains on track despite the ongoing war in Iran. On Tuesday, U.S. Trade Representative Jamison Greer downplayed the likelihood of further delays due to the conflict. The meeting was initially scheduled for this week, but was postponed after Trump chose to remain in Washington to focus on the war. The summit is now set to take place in Beijing on May 14th and 15th. The conflict in the Middle East has added strain to already tense U.S.-China relations, particularly given uh China's role as a major importer of Iranian oil.

Iran "Humanitarians"

SPEAKER_01 12:19

We need China to buy some more soybeans, right? Uh Chinese purchases of U.S. soybeans for the current marketing year stand at an official number of 11.2 million metric tons. Uh, we'll get a new number later this week, I believe, or maybe we're holiday delayed, I'm not sure. China has yet to purchase any soybeans, U.S. soybeans, for new crop delivery, despite talk that they would buy 25 million metric tons per year for each year the next three years. And um, if they're gonna buy 25 million for this uh forthcoming marketing year for 26-27, which is the marketing year that begins on September 1st, they're probably gonna have to start with some forward uh purchases pretty soon. I mean, they could buy 25 million and do it really fast, but generally when you see that sort of uh book of sales to China, they start uh pretty early.

SPEAKER_00 13:02

The Strait of Hormuz may be reopened to fertilizer shipments as politicians and non-governmental organizations worldwide are considering allowing shipments through the waterway for humanitarian reasons. Uh, the plan is similar to the Black Sea Green Deal, which facilitated the safe export of Ukrainian grain during uh the war with Russia, the stoppage of fertilizer shipments due to the Iran war has raised concerns, not just for farmers, but for the global food system, as it is likely to drive up prices and worsen food insecurity worldwide.

SPEAKER_01 13:34

Yeah, when I think of Iran, the first thing that comes to mind is the word humanitarian. That's the that's the way I think of them. I don't know. I mean, it sounds like these are people outside of Iran talking about it, but this is Iran, this is this is their big point of leverage. So I don't know. I mean, it sounds nice, but I just don't know that they let that happen. Uh, what did cattle do yesterday?

SPEAKER_00 13:52

Cattle futures were sharply higher. Live cattle were a buck fifty-two to three forty-seven higher. Feeder saw gains ranging from 322 up to 582, boxed beef prices were also higher. Choice was up a buck 39 at 395.49, and select was up 192 at 392.93.

SPEAKER_01 14:06

Stock market again had an excellent day yesterday and is higher again this morning. Treasury's up just a little bit. US dollar is off. Crude oil is down 85 cents in the May WTI at 155. Last trade. Have a great day, guys. We'll be back on Thursday.