Tuesday’s annual USDA Crop Acreage Report held a major bearish surprise for the corn market as USDA pegged 2009 corn plantings more than 2 million acres above producers’ March planting intentions and nearly 3 million acres above the average of trade expectations.
The acreage report also held bearish news for the wheat market, but appeared moderately supportive for soybean prices.
USDA pegged U.S. corn plantings at 87.035 million acres vs. planting intentions of 84.986 million acres and prereport estimates that averaged 84.158 million acres in a range from 82.474 to 86 million acres. Last year producers planted 85.982 million acres.
USDA estimated U.S. soybean plantings at 77.483 million acres, toward the low end of trade estimates averaging 78.305 million acres in a range from 75 to 79.361 million.
However, soybean plantings are still up more than 1.4 million acres from what producers said they intended to plant back in March and are record high – nearly 1.8 million acres above the previous record of 75.718 million acres set last year.
Perhaps the biggest story in the acreage report is the fact that plantings of the four biggest U.S. field crops all exceeded producers’ March intentions.
In total, the June crop acreage survey “found” nearly 4.9 million acres of corn, soybean, wheat and cotton plantings that did not show up in the Prospective Plantings Report, which pegged planting intentions for the eight major U.S. field crops down more than 7 million acres from a year earlier.
This data confirms our suspicions that the March survey underestimated plantings because many producers put planting decisions off to the last minute due to high input costs and uncertainty about crop prices.
A big increase in corn acres in the western Corn Belt also indicates near-ideal planting conditions spurred producers to plant more corn there.
Corn plantings were up from the March intentions by 500,000 acres in Iowa and 600,000 acres in Nebraska.
This increase in western Corn Belt acres is especially bearish for the corn market, since that is where crop conditions are the best. Monday afternoon’s weekly crop update rated corn conditions 82% good/excellent in both Iowa and Nebraska.
On the other hand, the location of the added soybean acreage may be slightly supportive for soybean prices.
The only major soybean states to add acreage in Tuesday’s report were Minnesota and Indiana, where actual plantings were said to be up 200,000 acres and 100,000 acres, respectively, from the March intentions.
Nebraska soybean acres dropped by 500,000 from the March intentions and Iowa soybean acres fell by 50,000.
Most of the soybean plantings added vs. the March report were in lower-yielding states such as South Dakota (+400,000 acres), Missouri (+350,000 acres), North Dakota (+150,000 acres).
Soybean acres were also added in the Delta and Midsouth states, where the crop is now coming under stress from hot, dry weather.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.