USDA Acreage report offers surprises

But with the US Department of Agriculture (USDA) projecting 2023-24 US corn ending stocks to reach 2.022 billion bushels, the price of corn sliding to multiyear lows, and on-farm corn stocks reaching record capacity, many analysts were expecting a more constrained number of acres planted to corn this year. They appear to be wrong.

In its June 28 Acreage report, the USDA estimated area planted to corn in 2024 at 91.475 million acres. While this figure is down 3.3% from the 94.641 million acres planted in 2023, it is not only higher than the range of pre-report trade expectations, it is also a solid step above the 90.036 million acres projected in the USDA’s March Prospective Plantings report.

Catching the market off guard, September corn futures tumbled 3.6% after the acreage data was released, bringing the contract from its recent high in May at $4.81¾ per bushel down more than 15% to its June 28 close of $4.07½ per bushel.   

“I think farmers were reluctant back in March to report how many corn acres they would have because they’re still holding on to old crop corn stocks,” said Tanner Ehmke, lead economist for grains and oilseeds, at CoBank. While some analysts are projecting the expanded 2024 corn acres to translate to heavier 2024-25 ending stocks at over 2.3 billion bushels, a 16% increase from the current marketing year’s 2 billion-plus carryout forecast, Ehmke said his outlook is not very bearish.

“Remember that we have strong ethanol demand, corn export sales commitments are up 37% year over year, we’ve got a concerning situation of 8 million acres that were affected by recent floods, and we have a concerning outlook on weather that’s projected to be hot and dry in the Corn Belt this summer,” he said. “So yes, we’re sitting on a lot of stocks right now, and that is very bearish, but things do have the potential to change quickly. If we maintain strong usage and we end up with a problem this growing season, then the stocks situation could tighten pretty quickly.”

As Ehmke mentioned, the trade was concerned about lost acres due to severe flooding across the Upper Midwest where some locations received more than 18 inches of rain during three days of heavy rainfall in late June. It was unknown how many planted acres were destroyed, and any area lost was likely not reflected in the June 28 Acreage report since that data was collected via surveys administered in early June. Ehmke said a true accounting of remaining acres may not be known until late summer when harvest reports are released.

But some ideas were the surplus water may be more beneficial than harmful, especially since the heavy rains helped offset some of the heat stress impacting crops in prior weeks. Also, for crops that survived or soybeans that were replanted, the saturated soils may provide ample moisture to endure a summer that is expected to be hot and dry.

In the June Acreage report, the USDA estimated the area planted to soybeans this year at 86.1 million acres, up 3% from 83.6 million acres in 2023 but slightly below the average of pre-report expectations as well as below the initial forecast of 86.51 million acres projected in the March 28 Prospective Plantings report.

The USDA also said 47.24 million acres were planted to all wheat, down 5% from 49.575 million acres planted in 2023. But the USDA forecast harvested area at 38.785 million acres, up 4% from the estimated 37.272 million acres harvested in 2023 due to fewer abandoned acres this year. Pre-report trade expectations ranged from 47.1 million to 49 million acres.

Estimated winter wheat planted area was 33.805 million acres, down about 1% from the prior estimate, down nearly 8% from the 36.699 million acres planted in 2023, and below pre-report trade expectations that ranged from 34 million to 35.281 million acres. Of the total, the hard red winter estimate was 24.1 million acres.

The USDA estimated the area planted to spring wheat other than durum at 11.27 million acres, up 0.6% from 2023, including hard red spring at 10.6 million acres.

The area planted to durum this year was estimated 2.165 million acres, up 29% from 1.676 million acres in 2023, above the 2.028 million acres forecast in the March Prospective Plantings report and above trade expectations that ranged from 1.9 million to 2.1 million acres.