On June 30 USDA released its annual Acreage report, which is the result of field surveys of planted acres in the U.S. in 2010. The surveys were taken during the first two weeks of June and this USDA Acreage report updates the USDA's March estimates from its Prospective Plantings report.
While the new acreage numbers and grain stock numbers USDA released June 30 are a "Game Changer" and have resulted in increased corn and soybean prices this past week, more uncertainty lies ahead. There is concern that all the excessive rain Iowa and other areas of the Corn Belt have had in recent weeks is making yields even more uncertain for this year's crops. A lot will depend on weather during pollination for corn during July, and pod set for beans in August.
Corn acreage is up in the U.S., but is down in Iowa this year
Corn acreage is up 2% in the U.S. this year compared to last year, and soybean acreage is also up 2% over a year ago. Corn growers planted 87.9 million acres this spring across the nation. Nationally, planted soybean acres in 2010 are estimated at a record 78.9 million acres, up from 77.5 million acres in 2009.
Estimated Corn Acres 2010 (millions of acres planted)
March 31 June 30
Iowa 13.5 13.0
Illinois 12.6 12.4
Nebraska 9.2 8.5
Minnesota 7.6 7.0
Indiana 5.7 5.9
South Dakota 5.0 4.4
Wisconsin 3.9 3.9
Missouri 3.3 3.7
For corn, the largest increases compared to last year are reported in Illinois and Kansas, each up 600,000 acres from 2009. The largest decrease is in Iowa, down 400,000 acres. Nebraska and South Dakota are each down 350,000 acres from 2009. For soybeans, the 2010 planted acreage at 78.9 could result in a record large harvested area. Planted soybean acreage in 2010 is up by 300,000 acres in Iowa, Kansas, Minnesota and Nebraska—while the largest declines are in Arkansas and North Carolina.
Game Changer: USDA downsizes 2010 U.S. corn crop estimate
The report, which cut the acreage for corn planting in the U.S. for 2010 by 1 million from the 88 million acre projected by USDA on March 31, left grain market analysts using such terms as "game changer" and "shocking." Don Roose, president of U.S. Commodities in West Des Moines, says, "If USDA is right, and it turns out we don't have the big corn surpluses after all, then this leaves the market more vulnerable to weather for the rest of this growing season."
Wet weather during June has already been worrying Iowa farmers. Iowa Secretary of Agriculture Bill Northey says the June rains, which were double and triple the normal amounts for June in many areas of the state, "actually caused more damage than if we had heavy rains or flooding at planting time in April or May. If you loose planting time in April, you have time to make it up. But for a lot of farmers who have lost corn and soybeans, July 1 is already too late to replant."
Widespread predictions of a La Nina weather pattern could bring hotter and drier weather in July and August than the Corn Belt has experienced in recent years, says Elwynn Taylor, ISU Extension climatologist. That may provide farmers with a long-awaited opportunity to sell their corn near the $4 per bushel point, which is breakeven for many farmers.
New crop corn could be billion bushels less than earlier estimated
Analyst Bryce Knorr of Farm Futures magazine called the USDA report "shocking" and says the news "basically suggests that new crop corn supplies could be up to a billion bushels smaller than previous estimates based on the larger estimates of planted acreage released in the USDA's Planting Intentions report at the end of March."
Market analysts note that corn demand for livestock feed could rise by as much as 40% this year, as livestock prices and profitability have improved. Corn supplies have been fairly tight by historical standards, and the smaller than expected 2010 crop is likely to squeeze them even further. "The demand side of the equation has been strong for the past several years," says USDA chief economist Joe Glauber. "We've seen big increases in supply, record crops, yet we're still seeing very, very strong demand for corn and soybeans. Another factor is that the federal government's biofuels mandate will require larger amounts of corn for ethanol production."
Iowa's 2010 corn acreage, based on the June 30 USDA Acreage report, will be about 400,000 acres less than forecast in the March 31 Planting Intentions report, which had pegged this year's Iowa corn acreage at 13.5 million acres.
Concern now is how much yield damage heavy rains caused
For Iowa farmers, the concern now is how much the yield potential has been hurt by heavy rains that came during the "June Monsoons" that struck many areas of the state, especially the "way above average" amount of rainfall that drenched southeast, south central and central Iowa in June.
"I'm looking at yellow corn in many areas of many corn fields here in southeast Iowa," says Jerry Main, who farms near Fairfield in Jefferson County. Waterlogged fields have deprived corn plants of oxygen and nitrogen, he says. George Naylor, who farms near Churdan in Greene County in west central Iowa, has had quite a few ponds in his fields this year and nitrogen has leached away. "I'm sure that some of the corn will run out of nitrogen later in the season."
Iowa's planted soybean acres are estimated to be up in 2010
For Iowa, planted soybean acres are estimated at 10.2 million acres, up 600,000 from 9.6 million acres in 2009, and 300,000 more than the 9.9 million projected in March by USDA. Iowa's planted corn acres are estimated at 13.3 million, down 400,000 acres from 13.7 million in 2009, and 200,000 less than the March projection of 13.5 million.
Meanwhile, the USDA Grain Stocks report on June 30 shows U.S. soybean stocks of 571 million bushels, compared to an estimated average of 592 million, and corn stocks of 4,310 million bushels, compared to an estimate of 4,613 million bushels.
Iowa Soybean Association president Delbert Christensen is not surprised by the increase in soybean acres in 2010. "But we are a little skeptical whether all those acres will be there at harvest, as a result of weather issues," says the Audubon County farmer. "We continue to be encouraged by the strong demand, as indicated by the Grain Stocks report. As of June 30, grain stocks show demand has continued to exceed expectations."
For a complete crop report and past yield data, check out this link: http://www.iowacorn.org/User/Docs/The%202010%20Crop-%20IA.pdf