Fundamentally Speaking

Joel Karlin
DTN Contributing Analyst

Already the fretting is starting about the likelihood of a late start to corn plantings and what impact this could have on production.

Keep in mind that it is still early and the wetness causing the delayed seedings are seen as being net positive to production as this moisture is helping recharge very low ground water supplies.

With the USDA’s March intentions report showing the highest amount of planted corn acreage since 1936 and sentiment that demand for U.S. corn will stay depressed even more with adequate supplies, there is little doubt that ending stocks for the 2013-14 year will climb appreciably from what is seen this year even if production is pared.

Even if planted acreage is reduced from the 97.3 million prospective planting figure, this can be more than made up by enhanced yields.

This arithmetic is shown in the accompanying graphic where the impact on U.S. corn production from falling yields and planted acreage is plotted.

Planted acreage numbers are going across the x-axis at the top in millions while yields in bushels per acre are going down the y-axis.

The box at the top left is our starting point as we assume production this year will be 14.681 based on planted acreage of 97.3 million acres, a harvested to planted ratio of 92%, and a yield of 164 bushels per acre.

The rest of the boxes are combinations of planted acreage and yields that would drop production by the amount in each box from that 14.681 billion figure.

For instance, if planted acreage was one million less at 96.3 million and yields were 10 lower at 154 bpa, production would be off 1.126 billion bushels from the original starting point of 14.681 billion.

The point here is that even if planted acreage were to fall one million acres this can be made up by a rise in yields of even less than two bushels per acre.

Note how if yields stay the same but acreage fall by a million production will fall anywhere from 124 to 151 million bushels but a two bushel increase in yields assuming acreage stays the same will range from 173 to 178 million bushels.

(KA)