In July, USDA's National Agricultural Statistics Service will collect updated information on 2011 acres planted to corn, soybeans, Durum and other spring wheat in four states. It's been widely anticipated that USDA's June 30 acreage estimates would be suspect. Farm Futures market analyst Arlan Suderman says that the numbers released Thursday were based on surveys done in early June when many farmers remained hopeful that they could still get their crops planted.
"That simply wasn't the case for many of them," Suderman said. "Local USDA have been widely quoted saying that 6.3 million acres of North Dakota cropland alone will probably not be planted this year. Yet the June 30 data shows North Dakota crop acreage is only down by 1.5 million acres. So just in that one state alone there is a credibility problem."
Suderman says NASS recognizes that and is attempting to get it right by resurveying producers. Producers in Montana, North Dakota, Minnesota and South Dakota will be resurveyed in July. Suderman is a bit surprised that they are not resurveying in Indiana and Ohio where there were significant delays as well.
"We really have to question whether producers in early June knew what they were going to do at that point," Suderman said. "At least it'll be good to get updated data from that area and the trade will begin anticipating now that acreage will decline."
If the newly collected data justifies any changes, NASS will publish updated estimates in the Crop Production report, to be released on Thursday, August 11. Suderman says that could impact trade around that report.
"The August report typically is one of the more significant reports anyway because it is the first report where corn and soybean yields are reported based on actual field surveys," Suderman said. "So it's highly anticipated by the trade and tends to lead to very volatile trade both ahead of the report and following the report. This will simply increase the tension around that report and likely the volatility surrounding that report."
Suderman says that the surprise that NASS is only resurveying the four states in the Upper Midwest will continue to leave the trade somewhat skeptical.
"We really won't have the final acreage numbers until we get the end crop insurance data, probably in October," Suderman said. "So it's going to keep this big question mark over the trade throughout the growing season."