USDA on Monday cut its estimates of U.S. corn and soybean acreage after resurveying farmers and doing further analysis of areas of the Midwest hit hard by heavy rains this spring.
USDA estimates that farmers planted 90 million acres of corn and 76.7 million acres of soybeans. That’s a drop for both commodities from the annual June acreage report, which estimated that 91.7 million acres of corn and 80 million acres of soybeans were planted.
USDA’s National Agricultural Statistics Service was quickly criticized for the June estimates and said it would resurvey growers and update its projections in the August Crop Production report, which was released Monday. The new estimates also incorporate satellite data and acreage certifications that farmers filed with the Farm Service Agency.
Traders had expected USDA's estimates of corn-planted acres to fall to about 88 million and soybean acreage to rise to just over 81 million.
Steve Georgy, president of Allendale, Inc. said the drop in acres was not what necessarily surprised traders, it was the projected average corn yield. USDA projected declining yields at 169.5 bushels per acre, which is down 6.9 bushels from 2018 but 3.5 bushels higher than the 166 bushels per acre projected in last month’s World Agricultural Supply and Demand Estimates report.
That projection raised the original 1.6 billion-bushel new crop carryout projection to 2.18 billion bushels for corn. “When you talk about a miss and you talk about what threw the entire industry off, how can it be so different? ... We just found a ton of corn and that is what is giving us this pressure at this point.”
USDA Chief Economist Rob Johansson said there were a few reasons on why the corn yield changed. For instance, despite seeing acres drop in major Corn Belt states, other states added more corn acres. “We saw more acres going in in Kansas, Oklahoma, Texas, Mississippi, Georgia, Kentucky, Wisconsin, and Idaho. Those states went up a bit relative to our previous estimate,” Johansson said.
He also noted weather conditions slightly improved from July to August since they calculated numbers for the last report. “In July, we still had a lot of fields that hadn’t been planted yet that we expected to be planted,” Johansson said.
The nation’s corn crop is expected to total 13.9 billion bushels, a 4% reduction from 2018. Soybean production is estimated at 3.68 billion bushels, a cut of 19% from 2018 with a yield of 48.5 bushels per acre.
Johansson said there’s been a consistent decline from the planting intentions number and that is consistent with weather conditions.
“Soybeans doesn’t seem to have picked up any extra acres, so we are likely to be down in terms of total acreage this year,” Johansson said. “Producers were likely unable to get out and plant a couple million acres that would have went into production.”
Traders were estimating an 830-million-bushel carryout projection in this month’s WASDE; USDA’s projection puts carryout at 755 million.
“That may be something that if we get beans to give a little life, maybe that will help contribute to slowing down the selling here for corn,” Georgy said.
Markets traded sharply lower after the release of the reports with corn dropping 25 cents per bushel and soybeans falling 12 and a quarter cents.
“As of right now and as we play through things, everything is red here today,” Georgy said.
According to data from USDA's Farm Service Agency, farmers reported just shy of 20 million acres of prevented planting to USDA including 11.2 million intended corn acres and 4.3 million intended soybean acres. South Dakota reported the largest total of PP acres (3.86 million) as well as the highest totals of corn (2.8 million) and soybean (850,864) acres. Illinois reported the second largest acreage total at 1.5 million acres.
USDA also published a monthly World Agricultural Supply and Demand Estimates report on Monday that projected higher global corn stocks and lower global soybean production and stocks compared to July's forecast. Global soybean ending stocks were lowered “due to lower stocks in the United States and China,” and 2019-2020 U.S. corn stocks came in at 1.28 billion bushels, well above the 1.62 billion-bushel figure that traders expected.
This has been updated with additional figures and reaction.
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