Corn stocks were 14% below last year's levels and the lowest Q3 number since the 3.04 billion bushels in June of 1998, indicating strong global demand for corn. The USDA estimates in 2012 the U.S. will plant 96.4 million acres of corn, the most since 1937 when an estimated 97.2 million acres were planted; this came as no surprise as corn planted acres fell in line with analysts' expectations. The increased acreage of planted corn is the USDA's feeble attempt to increase production numbers, as their estimate of average yield, 166 bushels per acre, will certainly fall short due to sustained dry and hot weather across the Corn Belt. Soybean planted acres increased due to double-cropping and attractive pricing, in March, compared to corn.
Farmers are expected to plant 228.5 million acres of corn, soybeans, and wheat for the 2012 crop year, a 3.3% increase from 2011's 221.3 million acres. Improving agricultural economics is incentivizing farmers to plant as much acres as possible.
Corn planted acres for 2012 were estimated at 96.4 million acres, the largest acreage since WWII and a 5% increase from 2011's 91.9 million acres. This is an increase from March's estimate of 95.9 million acres, but not surprising as on average the USDA increases planted corn acreage by 1.3% from the March to June acreage report.
Soybean planted acres was estimated at 76.1 million acres, an increase of 1% from last year's 75.0 million acres and the third highest on record. Record breaking planted acreage is expected in New York, North Dakota, and Pennsylvania. South Dakota expects to tie its previous record high.
The increase in soybean acres planted was due to an early winter wheat harvest which allowed farmers to double-crop with soybeans. Another farmer incentive for planting soybeans was attractive new crop prices in March, compared to corn.
Wheat planted acres were estimated at 56.0 million acres, an increase of 3% from 2011's 54.4 million acres. Not much has changed since March's Prospective Planting report of 55.9 million acres as high wheat supplies provided little incentive for farmers to plant wheat.
Corn stocks as of June 1, 2012 were estimated at 3.15 billion bushels, a 14% decrease from last year. Of the 3.15 billion bushels, 1.48 billion are stored on farms, down 12% from 2011. 1.67 billion bushels were being held in off-farm locations, a 16% decrease from last year. Disappearance from March 2012 to May 2012 was 2.87 billion bushels a year prior.
Soybean stocks as of June 1, 2012 were estimated at 667 million bushels, a 8% increase from 2011. On-farm stocks were 179 million bushels, a 18% decrease from a year prior. 488 million bushels were located in off-farm locations, a 22% increase from last June. Disappearance from March 2012 to May 2012 was 707 million bushels, a 12% increase from last year.
Wheat stocks as of June 1, 2012 were estimated at 743 million bushels, a 14% decrease from a year prior. 112 million bushels were held in on-farm locations, down 14% from last June. Off-farm stocks were estimated at 631 million bushels, a 14% drop from a year ago. Disappearance from March 2012 to May 2012 was 457 million bushels, a decrease of 19% from last year.
Today marked the first time a USDA report of this magnitude was released while the market was open. Corn, soybean, and wheat prices rallied but most likely due to the cheap dollar and dry hot weather across the Corn Belt, not these reports. We believe corn prices will remain strong going forward as we feel the planted acreage was well above actual numbers and prices will be supported by diminishing yields due to the continued heat wave in the Corn Belt.
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