What is in this article?:
• Depending on average yield, the potential change in the estimate of harvested acreage of corn is not likely to be large enough to alter prospects of surplus supplies, but could be large enough to stabilize corn prices.
• Any change in the estimate of harvested acreage of soybeans is not expected to be large, but could confirm prospects for another year of very tight stocks that would support prices at or above the current level.
Gap would narrow
“If the final difference is equal to the largest difference of the past six years (2011), the gap will narrow by 2.5 to 2.6 million acres. Planted acreage of corn reported to FSA increased from September to the final estimate by only 228,000 acres in 2011 and 213,000 in 2012.
“The increase may be larger this year due to the lateness of planting and the extension of the FSA deadline for reporting planted acreage. It would be a surprise if the increase totaled 2.5 to 2.6 million acres, leading to the expectation that the NASS estimate of planted acreage may be reduced in future Crop Production reports,” Good said.
According to Good, the question is whether any reduction in the NASS estimate of corn-planted acreage, and acreage harvested for grain, could be large enough to alter prospects of a substantial increase in corn stocks by the end of the current marketing year.
“Historically, the final estimate of planted acreage has not differed from the June estimate by large amounts,” Good said.
“The largest differences in the previous 10 years were in 2006 and 2008 when the final estimates were 1.039 million (1.3 percent) and 1.345 million (1.5 percent) less than the June estimates, respectively.
“A similar decline this year would point to a 1.3 to 1.4 million-acre reduction in the estimate of planted acreage. Such a decline would require the FSA report of planted acreage to increase by about 1.2 million acres in order to narrow the gap between the two estimates into the historical range.
“Such an increase would be outside the recent experience, suggesting the NASS estimate could be reduced by as much as 2 million acres. With an average yield near 155 bushels, a 2 million-acre reduction in the estimate of harvested acreage would reduce the production estimate by 310 million bushels and result in year-ending stocks of about 1.545 billion bushels, based on current consumption forecasts,” he said.