When the USDA released its Planted Acreage Report Monday, the size of the corn and soybean crops switched from wild guesses to educated guesses. And with the USDA proviso that flooded acres and unplanted acres are still undetermined, the size of the crop will still be unknown until the final estimate is made six months from now. For now, corn acres are down from last year and beans are up from last year, and we’ll examine what that means.

For the record, corn acreage was estimated by USDA at 87.327 million acres, compared to the 2007 acreage of 93.600 million. However, by eliminating silage and some flooded acres, the harvested area is estimated at 78.940 million, compared to 86.542 million last year. Comparatively, that is up 1.31 million from the March 31 Intentions report.

Planted acres
State 2007 2008
IL 13,200,000 12,300,000
IN 6,500,000 5,700,000
IA 14,200,000 13,700,000
KS 3,900,000 4,100,000
MI 2,650,000 2,350,000
MN 8,400,000 7,800,000
MO 3,450,000 2,900,000
NE 9,400,000 9,000,000
ND 2,550,000 2,400,000
OH 3,850,000 3,350,000
SD 5,000,000 4,650,000
WI 4,050,000 3,800,000

While harvested acreage drops from planted acreage, it is noteworthy that the flooding caused USDA to drop its estimates of harvested acreage to 11,500,000 in Illinois and 12,800,000 in Iowa. Nationally, USDA projects 7.6 million fewer acres of corn will be harvested in 2008, compared to last year. University of Illinois Extension Marketing Specialist Darrel Good says the yield potential is difficult to predict, but if the weather and crop improve, and the USDA estimate of 148.9 bushels per acre national average is reached, then the crop potential may approach 12 billion bushels.

In addition to the Planted Acreage report, USDA also released its estimates of grain stocks, as of June 1. Good said the corn stocks of 4.028 billion bushels were 500 million above levels of 2007, and use was about the same as last year. However, continued drawdown of stocks will depend on the rate that the livestock herd is reduced and the amount of wheat that replaced corn as a feed grain. He says that may mean livestock use may be less than the 6.15 billion projected by USDA. Good says if corn stocks begin to rise, there will be less need for rationing than has been the case.

Compared to the corn crop, the soybean crop grew in size from last year, but is a slightly smaller than the 2006 record crop. Acreage is estimated at 74.5 million, a 17% increase from 2007. That means an increase in planted acreage in all states, led by a 950,000 jump in acreage in Nebraska, with 900,000 acre increases in Illinois and South Dakota. When the statistics were taken earlier in June, only 79% of the soybean crop had been planted, the least in the past 12 years.

Planted soybean acres
State 2007 2008
IL 8,200,000 9,100,000
IN 4,700,000 5,500,000
IA 8,550,000 9,400,000
KS 2,600,000 3,200,000
MI 1,750,000 1,900,000
MN 6,250,000 7,100,000
MO 4,600,000 5,300,000
NE 3,800,000 4,750,000
ND 3,050,000 3,400,000
OH 4,150,000 4,600,000
SD 3,200,000 4,100,000
WI 1,350,000 1,650,000

USDA indicated that flooding may eliminate about 500,000 acres each in Illinois and Iowa. Marketing Specialist Darrel Good said the 74.533 million acre estimate for soybean planting is 10.9 million acres more than last year and 260,000 less than what farmers said in March that they intended to plant. Harvested acres are expected to be 72.121, meaning about 1.4 million more acres will be abandoned than usual. While good summer weather could produce a good crop still, Good says the market is somewhat skeptical about that.

Soybean stocks were estimated at 676 million bushels, and Good says use was near normal in the past three months, dropping stocks levels 416 million bushels below levels of 2007. Good says if production falls short of USDA’s 3.1 billion bushel target, stocks will be tight for another year.

Summary:
USDA’s acreage estimates of 87.3 million for corn and 74.5 million for soybeans will be the targets for the market to trade until production estimates are released in about six weeks. USDA’s asterisk on the numbers because of the uncertainty created by the recent flooding will keep the market guessing more than usual. However, corn stocks may reduce the need for further rationing, while bean stocks are considerably tighter than a year ago and the market will remain strong.