Call it “bloody Tuesday,” because of the USDA acreage and grain stocks reports that caught many farmers and commodity traders by surprise. The June Planted Acreage Report indicated more than 87 million acres of corn, a one million jump from last year and a two million jump from the March Planting Intentions Report. In concert with increased corn production, USDA found more corn stocks on hand than had been calculated, so with the country awash in corn, it is no wonder DEC corn settled down the 30 cent daily limit and lost 92 cents for the month. Where did all of this corn come from?
USDA’s Planted Acreage Report forecasts 87.035 million acres of corn in 2009, up from 85.982 million last year.
IL is up 200,000 acres to 12.3 million acres
IN was steady at 5.700 million acres
IA is up 400,000 to 13.700 million acres
KS acreage declined 50 thousand to 3.800 million
MI was steady at 2.400 million acres
MN was steady at 7.700 million acres
MO is up 300,000 acres to 3.100 million
NE is up 600,000 acres to 9.400 million
ND acreage declined 650,000 to 1.900 million
OH acreage is up 100,000 to 3.400 million
SD acreage is up 250,000 to 5.000 million acres
Those Cornbelt states were responsible for 1.750 million additional acres. However, there were some significant changes compared to the March Planting Intentions report, says University of Illinois marketing specialist Darrel Good, “Acreage exceeded intentions by 100,000 in Illinois, Michigan, Minnesota, Ohio, Pennsylvania, and South Dakota. Acreage is 400,000 less than intentions in North Dakota.” In all, the planted acreage exceeded the intentions report by 2.049 million acres. That was a surprise to many, given the volume of delayed plantings from Missouri to Ohio. In fact, University of Missouri marketing specialist Melvin Brees says, “Surprisingly, especially for those located in the northern counties, corn acreage is up 300 thousand acres and soybean plantings are up 200 thousand acres in Missouri from last year. This is partially explained by a 450 thousand acres decrease in wheat acreage, but surprising given the planting delays and some fields still not planted in North Missouri.”
So how much corn will we produce with such abundant acreage? Good says, “If the U.S. average yield is near the adjusted trend of 153.4 bushels projected by the USDA earlier this month, the 2009 crop would total 12.288 billion bushels, 353 million larger than the early month projection.”
USDA notes the 87 million acres of corn will be the second largest crop planted, but USDA is als quick to say that 97% of the intended acreage had been planted at the time the surveyors tallied their estimates, but the 10 year average is only 98%. “The return of dry, warm weather in late May allowed producers to make rapid planting progress in the Corn Belt and Great Plains, and by May 31, corn planting was 93 percent complete compared with the average of 97 percent. Growers in Illinois, Michigan, North Dakota, Ohio, and South Dakota planted over two-thirds of their intended corn acreage between May 10 and May 31. However, planting progress in Indiana, Illinois, and North Dakota still lagged behind the average pace by 17, 16, and 13 points, respectively.”
While corn production will be more than most folks had imagined, given the wet spring weather and all of the unplanted, or just planted, acres, there is also a considerable volume of corn in storage. USDA’s quarterly grain stocks report put corn on June 1 at 4.266 billion bushels, which is 238 million larger than stocks of year ago levels, and more stocks than traders had guessed. Good says, “Stocks were about 185 million larger than if third quarter domestic consumption had been at the rate projected by the USDA.” With more on hand than anticipated, Good says USDA’s July Supply and Demand Report will possibly raise the corn carryout at the end of August 2010.
Summary:
Cornbelt states have reported that 1.75 million more acres of corn were planted than last year, which contributed to the national 87 million acres of corn The USDA Planted Acreage Report found more corn being planted than what farmers indicated would be planted in the March Planting Intentions Report. Additionally, corn consumption has been less than expected, contributing to larger than normal stocks on hand, and larger carryout this year and next.