July 3, 2017
JUNE 30 USDA REPORT INCREASES 2017 CORN ACREAGE
The late June USDA Acreage Report is always highly anticipated, because it becomes the first “hard data” after the March USDA Plantings Intentions Report to give an indication of crop production levels for a given growing season. Many times, the June USDA Report can have a big impact on grain market trends, either upwards or downwards, and 2017 did not disappoint, with an initial positive market response for both corn and soybeans. Producers planted significantly more corn and slightly more soybeans, compared to the March Planting Intentions Report, according to the latest USDA Report on June 30. USDA surveyed more than 70,000 agricultural producers during the first two weeks of June to gather information for the June 30th USDA Report.
The biggest surprise in the June 30th USDA Acreage Report was that total 2017 planted corn acres in the U.S. were listed at 90.9 million acres, which was an increase of 890,000 planted corn acres from the March USDA Planting Intentions Report. The projected 2017 corn acreage in the June Report is a decrease of about 3 percent from the 2016 planted acres. The 2017 U.S. estimated corn acreage compares to 94 million acres in 2016, 88 million acres in 2015, 90.6 million acres in 2014, 95.4 million acres in 2013, and 97 million acres in 2012. The June 30th USDA estimates for U.S. planted corn acreage in 2017 was well above the average estimates by most grain market analysts; however, there was still a slight positive response to the corn futures prices on the Chicago Board of Trade (CBOT) immediately after the release of the USDA Report on June 30.
The June 30th USDA Report estimates that a record number of soybean acres will be planted in 2017 across the U.S. The Report listed 2017 planted soybean acres at 89.5 million acres, which is an increase of approximately 6 million acres from the 2016 planted soybean acres. The projected 2017 U.S. soybean acreage was slightly above the March 1st planting intentions estimate. The USDA projection was below the average grain trade estimate by over 400,000 acres, and resulted in some significant strength in soybean prices on the CBOT immediately after the USDA Report was released on June 30. The 2017 soybean acreage is expected to increase or remain steady in 27 of the 31 major soybean producing States, as compared to 2016 acreage levels, with twelve States expected to have record soybean acreage.
The June 30th USDA Report pegged total 2017 U.S. wheat acreage at 45.7 million acres, which would be lowest total U.S. wheat acreage since USDA began tracking national crop acreage in 1919. The projected 2017 wheat acreage compares to 50 million acres in 2016, 54.6 million acres in 2015, and 56.8 million acres in 2014. Significant declines in wheat acreage were reported in North and South Dakota, Kansas, Nebraska, and Oklahoma. Based on the June 30th USDA Report, total cotton acreage is estimated at 12.1 million acres, which is up approximately 20 percent from 2016 U.S. cotton acreage.
Some areas of the Eastern Corn Belt struggled with delayed planting this Spring, and portions of the upper Midwest were it with severe storms and excessive rainfall during June. In addition, some areas of the Western Corn Belt and Plains States have become quite dry, as we head into the critical tasseling and pollination period for corn. As of early June, USDA is projecting 2017 national average yields at 170.7 bushels per acre for corn and 48 bushels per acre for soybeans, which compares to the record final U.S. average yields in 2016 of 174.6 bushels per acre for corn and 52.1 bushels per acre for soybeans. Some private analysts have lowered 2017 U.S. corn and soybean yield expectations, based on current U.S. crop conditions in late June.
Note — For additional information contact Kent Thiesse, Farm Management Analyst and
Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960);
E-mail — email@example.com)