Supportive to corn last week was the updated acreage figure of 92.7 million acress, which though 1.6 million acres larger than March, fell short of the 93.8 million acre analyst consensus and much lower than some analysts' projections with an outside shot of 96 million acres.
Adding to the positive tenor was further confirmation that the increase in U.S. corn area this year vs. 2020 is concentrated in the states of ND, SD and MN, all three of which are dealing with severe drought conditions.
While that situation may ameliorate this week with rains in the forecast for that part of the country, the long-term outlook is likely to stay poor and this probably will weigh on the national corn yield which the USDA has pegged at a record 179.5 bushels per acre (bpa), above the prior high of 176.6 bpa, and that projection is looking increasingly tenuous.
Less U.S. corn area was planted this year than thought; the already iffy condition of the 2021 crop and understated exports may mean next year's ending stocks will come in below one billion bushels (bb) vs last USDA estimate of 1.357 bb.
Similar to corn, the USDA soybean acreage of 87.6 million was 1.4 million acres below the average trade guess and 45,000 below the March intentions as much of the 2021 U.S soybean crop is also seeded in the driest parts of the country.
With this low acreage and also uncertainty as to whether the USDA's 2021 soybean yield forecast of 50.8 bpa, the second highest ever, will be attained it appears that only severe rationing will keep ending stocks from falling below 100 million bushels (mb) vs last USDA forecast of 155 mb, so question is how high do values have to go in order to accomplish that task.
This chart shows the change in U.S corn and soybean plantings from the March intentions to the June acreage report and then from those June figures to the planted area numbers in the final crop production report of the year in 1000 acres.
Given that the 25-year average change from the June acreage to final planted area figures is down 459,000 in corn and down 415,000 for soybeans combined with fast plantings this year suggest final 2021 corn and soybean area should be close to June 2021 acreage figures of 92.8 million acres of corn and 87.6 million acres of soybeans, making any relaxation in feed prices entirely dependent on the attainment of at least trend-type yields.
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