Many crop market analysts reacted to USDA’s “Acreage” report yesterday by questioning the unexpected increase in acres planted to corn. These analysts believe that, if the new data prove correct, it would significantly alter the supply and demand situation for grains and oilseeds this crop year and next.
Corn planted area for all purposes in 2011 was estimated at 92.3 million acres, up 5 percent from last year, and the second highest planted acreage in the United States since 1944, behind only the 93.5 million acres planted in 2007. Corn acreage expected to be harvested for grain was estimated at 84.9 million acres, up 4 percent from last year. Soybean planted area for 2011 was estimated at 75.2 million acres, down 3 percent from last year. Area for harvest, at 74.3 million acres, was also down 3 percent from 2010. Total planted acres of corn, soybeans, wheat, cotton, and hay were 295.1 million acres compared with 298.1 million acres intended in March. USDA also reported yesterday that it will re-survey farmers in four states where plantings were delayed, and the results of that re-survey will be published in August.
Dr. Gary Schnitkey, University of Illinois, noted the two following observations about USDA’s report:
- Western corn-belt farmers appear to have reacted to market signals that project much higher corn returns by planting more corn. It would have been interesting to see if eastern corn-belt farmers would have reacted to the same incentives had spring weather been more conducive to planting. Corn acres may have been higher in the eastern corn belt had more normal weather occurred, leading to much higher national corn acres than expected.
- Futures prices for corn fell after the release of the June 30th “Acreage” report. Part of this decline may be because actual corn acres being higher than market expectations. While higher than expected, yesterday’s report of 92 million corn acres is the same as made by Joe Glauber for USDA at the 2011 Agricultural Outlook Conference in February. Even with poor weather in parts of the country, farmers with today’s technologies have a remarkable ability to plant crops.
USDA also issued a “Grain Stocks” report yesterday that indicated a much larger than expected decline in corn and soybean usage during the second quarter of 2011. Analysts indicated more data will be needed from USDA and the market to better determine if the latest quarterly Grain Stocks report is correct.
