Nudging corn, soybean yield guesses
As the Midwest corn and soybean harvest accelerates, most of the production attention is focused on yield reports. Still, last week's report of planted acreage from the USDA's Farm Service Agency (FSA) leaves some uncertainty about the magnitude of planted and harvested acreage of those crops.
For corn, acreage that had been reported to FSA as planted totaled 91.428 million, 2.657 million more than reported the previous month. Based on survey data, the USDA's National Agricultural Statistics Service (NASS) has estimated planted acreage at 97.379 million acres. Acreage reported to FSA is expected to be less than the NASS estimate since not all producers are enrolled in programs that require reporting of planted acreage to the FSA. Planted acreage reported to FSA as of the September report accounted for 93.9 percent of the total estimated by NASS and the difference was 5.951 million acres.Over the previous six years, the final total corn acreage reported to FSA averaged 96.9 percent of the final NASS estimate, in a range of 96.4 to 97.5 percent. The difference between the FSA and NASS acreage estimates averaged 2.785 million acres, in a range of 2.381 in 2007 to 3.295 million in 2011.
Recent history suggests that the difference between the corn acreage reported to FSA and acreage estimated by NASS this year will be smaller when final estimates are available. If the final difference is equal to the largest difference of the past six years (2011), the gap will narrow by 2.5 to 2.6 million acres. Planted acreage of corn reported to FSA increased from September to the final estimate by only 228,000 acres in 2011 and 213,000 in 2012. The increase may be larger this year due to the lateness of planting and the extension of the FSA deadline for reporting planted acreage. It would be a surprise if the increase totaled 2.5 to 2.6 million acres, leading to the expectation that the NASS estimate of planted acreage may be reduced in future Crop Production reports.
The question is whether any reduction in the NASS estimate of corn planted acreage, and acreage harvested for grain, could be large enough to alter prospects of a substantial increase in corn stocks by the end of the current marketing year. Historically, the final estimate of planted acreage has not differed from the June estimate by large amounts. The largest differences in the previous 10 years were in 2006 and 2008, when the final estimates were 1.039 million (1.3 percent) and 1.345 million (1.5 percent) less than the June estimates, respectively. A similar decline this year would point to a 1.3 to 1.4 million acre reduction in the estimate of planted acreage. Such a decline would require the FSA report of planted acreage to increase by about 1.2 million acres in order to narrow the gap between the two estimates into the historical range. Such an increase would be outside the recent experience, suggesting the NASS estimate could be reduced by as much as two million acres. With an average yield near 155 bushels, a two million acre reduction in the estimate of harvested acreage would reduce the production estimate by 310 million bushels and result in year ending stocks of about 1.545 billion bushels, based on current consumption forecasts.