Two recent U.S. Department of Agriculture reports, Prospective Plantings and Grain Stocks, indicate that grain stocks are likely to remain plentiful over the next year. The outlook for low grain prices will help support calf and feeder-cattle values, as feedyards can afford to pay more for cattle when cost of gain is low.

According to the Livestock Marketing Information Center (LMIC), USDA data indicate that farmers intend to plant more corn than expected and current corn stocks are slightly more than pre-report estimates. Upon release, these USDA reports lowered prices in both the futures and cash markets by about 3 cents per bushel, and price projections for the next crop-marketing year also dropped slightly. For the 2001/02 crop-marketing year, the national average corn price received by farmers is expected to be about $1.95 per bushel, according to LMIC. If normal weather occurs this summer, corn prices may be about unchanged next year.

According to USDA, corn growers intend to plant 79 million acres in 2002, up about 4 percent from 2001. Much of the increase in plantings will be in the Corn Belt. So far, weather conditions in most areas have been favorable for early planting. Producers intend to plant 12 percent fewer acres of sorghum in 2002, compared 2001. Most of the sorghum acreage decline will be in Texas.

As of March 1, USDA reported corn stocks 4 percent below a year ago, slightly larger than the pre-report estimates. Still, LMIC reports, corn stocks are on track to decline about 300 million bushels from a year earlier at the end of the current crop-marketing year, in September 2002.