Acreage Sets Stage For Big 2011 Corn Crop

Acreage Sets Stage For Big 2011 Corn Crop

Number of acres planted to corn in this year in U.S. is larger than expected and prices may plummet, says ISU economist. Soybean acreage is well below expectations.

New acreage and grain stocks information released last week by USDA suggests a fundamental shift in the corn market. Corn growers are now faced with prospects for a large crop in 2011 and prices that will likely slide. Just how far prices fall is the question.
That's how Iowa State University Extension grain marketing economist Chad Hart sees the situation developing. Even with some lost acres due to flooding, a fairly large U.S. corn crop is being projected this year. Assuming the 2011 growing season continues without widespread severe weather problems, and the market begins anticipating we'll have a national average corn yield of 160 bu. per acre, which is the trend line yield or close to it, farmers could see a gradual decline in corn prices right into harvest.
USDA's annual Planted Acreage Report, released June 30, shows a larger corn acreage in the U.S. in 2011 than the trade had been expecting. And USDA's latest quarterly Grain Stocks Report also released June 30 indicates that more corn is in the nation's bins than anticipated. Both reports are based on data gathered by surveys of farmers and grain elevators earlier in the month.
Corn acres are exceeding expectations for 2011 by wide margin
These USDA acreage and grain stocks updates are both providing a bearish shot to the corn market, as corn acreage and corn stocks are both higher than previously expected, notes Hart. Soybean stocks are also higher, but the soybean numbers are within the grain trade's range of guesses made prior to USDA's June 30 stocks in all positions report. Soybean plantings seem to have borne the brunt of the wet weather this spring.

Nationwide, the data show 92.3 million acres are planted to corn in 2011, with an expectation that 84.9 million of those acres will be harvested. The trade's estimates prior to release of the USDA report ranged between 89.5 million and 91.5 million acres, which means U.S. corn plantings have exceeded expectations by a sizable amount.

On the flip side, U.S. soybean plantings at 75.2 million acres in 2011 are well below what the grain trade had expected prior to the estimates released in the June 30 USDA report. As it stands now, corn plantings in 2011 slightly exceed the number shown in USDA's March planting intentions survey, whereas U.S. soybean plantings are 1.4 million acres below the March intentions.

Iowa, Nebraska, Minnesota show big jump in corn acres

For corn, the states with the largest increases in 2011 planted acreage are Iowa (up 300,000 from March intentions), Minnesota (up 200,000) and Nebraska (up 500,000). States that didn't plant as much corn as they intended include Illinois (down 300,000), along with North Dakota, Ohio, South Dakota and Texas (all down 200,000 acres).

What about 2011 corn plantings as of June 30, compared to the number of acres planted last year? The two states which have the largest increases in acres planted to corn in 2011 compared to 2010 are Nebraska (up 850,000 acres) and Iowa (up 800,000). Other notable increases in corn acreage in 2011 are South Dakota (up 650,000), Minnesota (up 400,000) and Wisconsin and Kansas (both up 250,000 acres each). The largest decrease in planted acres of corn is reported in Texas (down 350,000 acres), while New York, North Carolina and Washington in 2011 are each down 10,000 acres from last year.

The top 10 states in amount of corn acreage planted in 2011 are: Iowa, 14.2 million; Illinois, 12.5 million; Nebraska, 10 million; Minnesota, 8.1 million; Indiana, 5.9 million; South Dakota, 5.2 million; Kansas, 5.1 million; Wisconsin 4.1 million; Ohio, 3.5 million; and Missouri, 3.2 million.

Most major soybean states have planted fewer beans in 2011

For soybeans, only 4 states ended up planting more beans this spring than their March intentions survey results indicated they would plant: Kentucky, Ohio, Tennessee and Wisconsin.

Most of the major soybean producing states planted significantly less soybean acres than the March intentions survey reported they would plant. Illinois, Iowa, Minnesota, Missouri and Nebraska all have now reported at least 200,000 acres or less planted to soybeans in 2011, compared to earlier intentions.

However, USDA announced it will re-survey planted acreage in four states (Montana, North Dakota, South Dakota and Minnesota) due to flooding in the those states. USDA's National Ag Statistics Service in July will collect the updated information on the number of 2011 acres that are planted to corn, soybeans and spring wheat.

USDA will re-survey planted acres in 4 states in July

The USDA numbers released on June 30 are based on surveys conducted in early June when many farmers were hopeful they could get all their crops planted this year.  As the spring turned out, that simply wasn't the case for many of them, especially in these four states where continuing rains kept planters out of fields for a long period of time.

For example, local USDA personnel say perhaps 6.3 million acres of North Dakota cropland alone probably won't be planted this year. Yet the June 30 USDA Acreage Report shows North Dakota crop acreage is only down by 1.5 million planted acres in 2011. NASS recognizes this discrepancy and is attempting to get the numbers right by re-surveying farmers in these four states.

Another observation: It is a bit surprising USDA isn't going to resurvey Indiana and Ohio too, where there were significant planting delays as well this spring.

Report shows corn demand slowing down with higher prices

Combining the June 30 USDA acreage numbers with USDA's yield projections leads to a 2011 expected U.S. production of 13.474 billion bushels of corn and 3.225 billion bushels of soybeans. "That would boost U.S. corn supplies by roughly 275 million bushels, but lower soybean supplies by 60 million," he notes.

What about current supplies of corn and beans on hand in the U.S.? Both corn and soybean supplies received a boost from the USDA Grain Stocks report, issued June 30. The USDA Grain Stocks Report numbers show higher crop stocks than expected. Soybean stocks came in at 619 million bushels, roughly 20 million above expectations. Corn stocks are at 3.67 billion bushels, 350 million above expectations.

For both crops, disappearance during the March-May period was less than last year, showing demand did slow down with the higher crop prices, points out Hart. Soybean disappearance was at 630 million bushels, down 10% from last year. Corn disappearance was at 2.85 billion bushels, down 15%.

Relatively more grain is being held off-farm this year, compared to last year. Corn stocks are higher in the northern Corn Belt, especially in Minnesota and Wisconsin. The higher soybean stocks are spread throughout the country.

TAGS: USDA Extension
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