Despite the calendar flipping to August, the acreage debate in the U.S. continues to heat up. USDA’s June acreage report revealed corn acreage 91.7 million, a 3% increase from 2018. The report immediately drew criticism from both farmers and analysts, with some arguing the record wet Spring created conditions that hindered planting, instead of helping it.
As USDA prepares to release updated acreage numbers after officials had to re-survey due to the late season, analysts say producers should be prepared for several outcomes, including the idea USDA may raise acreage in its next report.
“If you look at what prices were doing in the Spring, they were attractive corn, especially on a cash level; prices weren't that interesting for beans,” Brian Roach of INTL FCStone to U.S. Farm Report host Tyne Morgan. “It wouldn't surprise me that planted acres maybe goes up in the report, but you have to remember the NASS in St. Louis will give some numbers to Washington DC. The World Outlook Board can decide what to do with harvested.”
Planted versus harvested could reveal the story this year, according to many analysts. As acres were planted at a record-slow pace, both agronomists and analysts are argue a large portion of the crop won’t mature quick enough for harvest.
“They could ratchet the harvested percentage down to reflect what we're all seeing, which is a lot of holes in a lot of key states,” Roach said.
However, an adjustment to harvested acres this early in the season may not happen, according to some analysts. If USDA does trim the harvested acreage number, would traders even care? Mark Gold of Top Third Ag Marketing said it just depends.
“It depends on the numbers they use,” Gold said. “I'm of the opinion that actual planted corn acres for corn, and not for silage, is somewhere around 85 to 87 (million) range, which is significantly lower than I think what the government is going to tell us.”
If USDA raises corn acreage in the upcoming report, he said officials could counterbalance the move by adjusting harvested acres.
“I really don't see them getting that aggressive on this report,” Gold said. “They basically said we're not going to give anything out until we really get into harvest.”
Gold thinks the overall report could produce a bearish outcome. To hear the analysts’ thoughts on yield, view this week’s Market Now segment.
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