Report revision talk underway-Ray Grabanski
Today is the USDA report, long awaited as it contains the projected planted acreage for corn, soybeans, and wheat.
These were much anticipated numbers, with all eyes focused on corn acreage and what happened to it in 2011 with late planting and wet conditions. How did farmers respond to the incentive to plant corn over virtually any other crop?
The second major question is the degree of prevented planting across the country. USDA's initial paper guesses in the June 10 report were that we lost 1.5 million acres of corn, soybeans were unchanged, and HRS wheat only lost 300,000 acres to prevented planting in spring 2011.
Pro Ag begged to differ, instead estimating all spring wheat lost 2.5 million acres to PP, while corn was likely much smaller at 300,000-500,000 acres or so. Another 400,000 was estimated by USDA to be lost after planting to flooding, which we have no reason to disagree with.
But the estimates in ND alone are way off, and it will take analysts months to figure out if the June 30th report is much better. Since this report is on conditions as of June 1, its likely there will be further revisions in October.
As for the USDA report, corn acreage was estimated at much higher levels than anticipated, with 1.6 million acres larger plantings than the trade expected, to 92.3 million acres. Basically, what this report showed was that farmers probably switched another 2 million acres of land to corn from the March 30 report to now due to the high price of corn (making intentions by May 1 at 94.2 million acres). This especially was true in IA, NE, and ILL where corn planting was ahead of normal this year. So, they basically kept seeding corn longer since there was up to $200/acre more profit raising corn than soybeans. Then due to the late planting and prevented planting problems in some states, we lost some of that additional acreage back so that we were within 100,000 acres of the original March 30 intentions figures.
Some of that additional acreage came from soybeans, with the soybean planted acreage dropped 1.4 million acres from the original March 30 intentions report, with most of those acres going to corn (but some probably lost to prevent plant as well). While there was great concern about prevent planting in corn and soybean country, in the end this was the two crops with the least amount of PP. In fact, ND, the worst impacted state with 6 million acres of PP ground, had the least amount of PP in the eastern part of the state (where most corn and soybeans are planted). In contrast, the Northwestern part of ND had significant PP acreage, likely over 50% of the land in this region which plants predominately wheat, barley, and sunflowers. The biggest loss was in durum acreage, which in this report was reduced to 330,000 less acres than expected at only 1.7 million acres (down 670,000 from the March intentions). Durum prices could rise to $25 on this news!