Fundamentally Speaking

By Joel Karlin
Contributing Analyst

The USDA corn and soybean production reports last week were much less bearish than the trade had feared for even though yields for each were hiked, planted acreage was chopped far more than had been anticipated.

This graphic shows the change in USDA estimated planted acreage for both U.S. corn and soybeans from the August to the November crop production report in 1000 acres.

2013 U.S. corn planted area was pegged at 95.341 million acres and next to last year is the highest figure since the mid 1930’s.

Still, this was down 1.903 million bushels from the August report and this is the largest acreage decline between those two months ever, topping the 1.113 million acre reduction seen in 2008.

For soybeans, planted area in the November report was projected at 76.493 million and that is down 690,000 acres from the August report.

This is a fairly sizable drop from the August number though there have been at least four other occasions since 1965 that the USDA has lowered planted soybean area even more between the August and November reports topped by the 1.720 million acre reduction back in 1980.

The lower acreage numbers were based on updated prevented planting figures compiled by the Farm Serves Agency that were supposed to be contained in the October report that was never released due to the government shutdown.

Though the trade had expected planted area to be chopped for both crops due to the historically late planting progress this past spring, the reduction for both corn and soybeans was larger than anticipated.

Keep in mind that the late plantings were primarily due to heavy rains this past spring that helped recharge subsoil moisture reserves that were parched by the 2012 drought.

With harvested corn acreage also down by 1.90 million bushels, with a 160.4 bpa forecasted yield, that is a loss of 305 million bushels worth of corn.

On the other hand, we see the heavy spring rains as we have mentioned many times in these posts as much more of a blessing than a curse feeling that they helped boost the national corn yield by at least 5.0 bpa resulting in 436 million more bushels worth of output using the new 87.2 million harvested area number.

(KA)

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