Thursday's Report Really Doesn't Mean Much
Mar 27, 2011
It’s all about corn this year. We need corn acres. We need corn yield.
The government will release their numbers at 7:30 a.m. CST on Thursday morning.
So what do all of these numbers have in common, including the government’s? Nothing. They mean absolutely nothing.
The game for the past six months has been about predicting whether corn or soybeans would win the acreage battle. But really, with tight stocks of corn supplies and that commodity leading all commodity prices up and down with reckless abandon recently, it’s really the only thing that matters.
In fact, in the grand scheme of things, Thursday’s acreage report really doesn’t matter at all. That’s why it’s called the Planting Intentions Report. It’s only intentions and as my dad always said, intentions don’t really matter without proper follow through.
Why does March not matter? Look at the recent history.
Last March USDA predicted 88.8 million corn acres. In June, the wet weather across the country brought that down to 87.9, nearly 1 million acres lower.
In 2009, the number jumped 2 million acres from March to June. It leapt 1.4 million acres from March to June in 2008, but that didn’t really count because of the severe Midwest flooding post survey time that altered the final number and arguably stared the supply shortage we face today.
The 2.4 million acre jump on 2007 was a huge difference maker.
So, while this report will give us a good indication of where we can end up this year, it’s far from the reality we’ll see next fall when this crop is harvested.
Keep in mind that, according to our survey:
- 24% of the farmers out there will leave their options open until they are ready to start planting.
- If any commodity price gets high enough, farmers will change their minds before planting.
- A big part of the jump expected in corn acreage is coming from the Dakotas, yet they are not confident that the weather will allow them to get it done.
And finally, even if we do hit more than 92 million acres as some anticipate, it will take a national yield of 160 bu./acre to match this year’s usage of 13.5 billion bushels.
