U.S. crop growers and users alike are anxiously awaiting USDA’s planted acreage report, which will be released on Thursday. Typically, the National Agricultural Statistics Service’s June 30 report sheds a pretty solid light on planted acreage and begins to fill in the yield outlook.
However, given this year’s weather uncertainty the report may not only fall short on answers, but could raise even more questions. The report will reflect total acres planted through June 16, and there were still a lot of unplanted acres, flooded acres and acres yet to be designated for replanting.
“In a typical year, estimates of planted acreage would be reasonably accurate at this point, but this year uncertainty remains and comes from a number of factors,” says Scott Stiles, extension economist-risk management, University of Arkansas. “These include not only flooding and late planting, but also the amount of forward contracting and crop insurance participation, all of which could have influenced growers’ planting decisions.”
Even casual market observers not that the extreme weather has increased futures’ market volatility in a year that was already dealing with record tight U.S. supplies of corn, soybeans and cotton.
Cropland from the eastern Corn Belt and northern Plains to the Mississippi Delta met with spring floods and now Minot, N.D., and the Missouri River is setting records late in the season.
The questions are not whether the June 30 report will paint a different picture than USDA’s March 31 planting intentions, the questions are how low will the acreage drop; which crops will lose and gain acreage; and how accurate will any of the numbers be? Worth noting is that the March report was released about two weeks before severe weather began to take its toll on several states.
Corn and rice are likely to be the big losers, and soybean acreage will likely gain some acres, Stiles notes. He adds that USDA’s June supply and demand report, made a rare move, but cutting U.S. corn and rice acreage ahead of the June 30 report. It cut planted corn acres by 1.5 million from the March intentions.
“The acreage uncertainty will remain in commodity markets after June 30,” Stiles says. “It’s what gets harvested that will matter most.”
Pork producers will be watching Thursday’s report to get some insight into long-term feed supplies, as the last two weeks they’ve watched potential profits erode quickly. “How many acres got planted; how stressed is the crop; how much is under water,” notes Chris Hurt, Purdue University agricultural economist. “There are yield concerns and the acreage data probably won’t be that good.”
While last week’s USDA June Hogs and Pigs Report showed modest production increases, concerns about the U.S. economy, consumer attitudes and domestic demand are making participants in the pork sector nervous.
“Pork producers are holding their breath. There’s just not going to be any excitement about expansion. We are very tight on corn inventory; we will need average or higher (corn) yields on the acres that got planted,” Hurt notes. In fact, it’s not just the size of the U.S. crop that will matter this year, but that of the Northern Hemisphere, and Canadian producers have faced significant weather and planting challenges of their own.
According to the March 31 planting intentions report, U.S. soybean acreage was projected down 1 percent to 76.6 million acres. Corn acres were pegged at 92.17 million, up 105 percent from 2010 levels.