Published on: 16:27PM Jul 23, 2009
USDA’s National Agriculture Statistic Service announced on 07/22/09 it will re-survey seven corn and two sorghum producing states, in response to variable weather conditions. If planted acreage adjustments are needed, USDA will include the cause and effect within its August 12th crop production report.
Allendale Inc needs to clarify, USDA’s additional data collection of this magnitude at the end of July, before the August crop production report is rather rare, however a similar adjustment was made just one year ago. The results of last years revision discovered 100 K fewer acres planted in IL, IN, MO and 50 K fewer acres in WI vs USDA June 30th, 2008 planted acres estimated. Immediately a number of “what ifs” for 2009 are circulating within the corn trade with regards to the anticipation USDA is likely to reduce corn acres planted but tempering outright enthusiasm by keeping in mind USDA is likely to increase its corn yield estimate. Within this special report, Allendale Inc includes a graph of several “what ifs” for you to glean prior to the USDA August crop production report release.
The starting point is the here and now which uses USDA’s most recent supply demand data estimates of 87.04 million acres planted, 80.11 mil acres harvested, 153.4 bushels per acre, and ending stocks of 1.55 billion bushels vs old crop stocks of 1.77 billion bushels. By comparison, Allendale Inc’s 2009/10 end stocks estimate would be 1.587 billion bushels of 2009/10 end stocks before any yield or acreage adjustment and represented in the far left column. What if USDA left the corn yield unchanged but reduced planted acres by 500,000, then end stocks could narrow by 5% to a level of 1.511 billion bushels. Based on present crop condition reports, Allendale Inc estimates the national corn yield average at 157.2 bushels per acre and if acres are reduced by 500,000 suggest end stocks of 1.813 billion bushels for a 14% increase.
Yet another “what if” USDA were to trim planted acres by a heavy 1 million acres and using Allendale Inc yield could suggest end stocks increase of 6.6% larger than presently estimated or 1.692 billion bushels. Our fourth scenario utilizes the corn trade yield talk of 159.5 bushels per acre with a 500,000 acre reduction and presents the potential for ending stocks of 1.996 billion bushels. Our fifth and final “what if” utilizes a University of Illinois record breaking national yield estimate of 161.9 bushels per acre associated with the trades notion of a 500,000 planted acre reduction, producing ending stocks over 2 billion bushels.
Some questions to muse over with regards to USDA’s Wednesday announcement, is it likely to reduce corn acres and increase sorghum acres (Illinois and Missouri) to suggest safe feed and fuel stocks? Are you considering similar corn acreage reductions as the trade of 500,000? Are you anticipating a mild increase to 157.2 bushels per acre as Allendale suggest or are you anticipating a heavy yield increase as University of Illinois is considering?
What are your thoughts regarding these scenarios? Are you more likely to implement marketing plan adjustments before or after the USDA August 12th crop production report?.........Joe Victor
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