Unlike last year when some early rains caused pond holes in fields, this year flooding along rivers have swept away hundreds of thousands of acres of cropland. Much of that has been since USDA's planted acreage data was collected about June 1. It could create questions surrounding USDA’s National Agricultural Statistics Service numbers.
The June 30 Planted Acreage Report will be a convergence of acreage uncertainty and market demand, yielding nothing more than price volatility. With the fade in the corn prices the past two weeks, the market seems satisfied with the acreage and is awaiting more information about yield. However, if the USDA pushes the planted acres low enough to surprise the market, July 4th fireworks could come a few days early.
Iowa State University agricultural economist Steven Johnson believes the market will look beyond the planted acreage number and focus on the harvested acreage. While that won’t be finalized until next January, Johnson says in his latest newsletter there is concern over the flooded acres.
USDA’s March Planting Intentions report forecast 92.178 million acres of corn, enough to meet the demand of the 2011-2012 marketing year and still build stocks. However the June 9th Supply and Demand Report pared back USDA’s acreage estimate to 90.7 million acres. Currently the market is expecting the number to be between 89.5 and 91.5 million acres with Thursday morning number close to 90.767 million.
Johnson says typically there is an 8% difference between planted and harvested acreage because of seed corn, food grade corn, silage, and fields that just are not harvested. However, he says this year that number could be closer to 8.3% because of the fields that were flooded and not harvested. He estimates those at 400,000 acres.
After Thursday’s report, Johnson says USDA will not make any radical changes in acreage until it can reconcile its numbers with that of the FSA Certified Acreage which will be included in the October Crop Production Report. However, he says private firms are perfecting their forecasting ability using satellite imagery, and they could have some predictions prior to the depth of harvest. Johnson quotes one firm has indicating “the flooding from the Missouri River flooding will impact more acres than was realized from both the Ohio and Mississippi floods in May. They estimated that flood waters along the Missouri river could impact 400,000 acres of corn and 350,000 acres of soybeans. Their models indicated that U.S. corn yield trends could be slightly below trend yields based on their early models, but that U.S. soybean acres would be below trend.”