Fundamentally Speaking

A head scratcher is why USDA lowered planted area by 5 million acres in the June 30 Acreage Report yet lowered harvested acreage by 5.6 million acres.

The harvested/planted ratio is 91.3% vs. 92.4% last month as these figures are now the latest acreage figures being used in 2020/21 balance sheet.

Why the drop, especially if much of the 5 million decline in acres was some poorer land with lower yields anyway, as this should point to a higher national yield.

Feedback we got from USDA notes that NASS publishes an "intentions" number for planted area in March, which the World Agricultural Outlook Board (WAOB) typically adopts in the WASDE.

But because NASS doesn't estimate harvested area until June, the WAOB is left to come up with their own estimate, which is seen in the May & June WASDE reports.

Then NASS surveys producers in early June in preparation for the Acreage report.

That is the information used to set both planted and harvested area, which the WAOB carries into the July WASDE.

This graphic shows the U.S. corn harvested/planted ratio on the right-hand axis vs. the percent the final U.S. corn yield deviates from the 30-year trend on the left-hand axis.

The current 91.3% harvested-to-planted ratio, other than the wet year of a year ago and the 2012 drought, is the lowest since 2006 and below the 91.5% average seen when yields are record high.

We have also included the U.S corn crop rating as of week 28 (the second week in July) using our usual ratings system where we weight the crop based on the percent in each category and assign that category a factor of 2 for very poor, 4 for poor, 6 for fair, 8 for good, and 10 for excellent and then sum the results.

The average for the harvested/planted ratio for all those years where crop conditions are at least equal or better than this year's 752 rating is also 91.5%.

If the ratio were to increase to 91.5%, that would only be another 26 million bushels (mb) over the 15.0 billion bushels (bb) currently forecast, but a 92% ratio is another 108 mb and if the ratio were to near its peak of 92.3% that would be 158 million more bushels assuming yields and planted acreage are unchanged at 178.5 bushels per acre and 92.0 million acres respectively.

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