Increases seen in acreage for both corn and soybeans
The U.S. Department of Agriculture's June crop report showed an unexpected increase in both corn and soybean acreage for 2009.
"In the March 2009 plantings report, principal crop area in the U.S. was shown over 7.5 million acres lower than in 2008," said Chad Hart, Iowa State University agricultural economist. "By the June report, nearly half of that area had returned to crop production. Corn, soybean and wheat planted area are all estimated higher than in March."
The new USDA estimate for soybean planting this year is 77.483 million acres, which is up from 75.718 million in 2008. The June number is up from a March prediction of 76.024 million acres.
Corn acres are estimated at 87 million nationwide, up 1 percent from last year, but down 7 percent from the historical high in 2007. The 2009 crop is still the second largest planted acreage since 1946.
"We're excited not just to see this report on acreage, which was much larger than we expected to see given planting conditions, but to see also that crop condition is far superior to 2008," said National Corn Grower's Association President Bob Dickey. "When the weather warmed up in several key states and the fields dried out, wheels were rolling and we were able to get a good crop in the ground. It's an exciting time for growers, and we're looking forward to a great year where we can meet all needs for food, feed, fuel and fiber."
A larger increase was expected in soybean acres, due to the wet spring and delayed planting, causing a slip in corn and wheat acres. However, the USDA report showed corn, soybean and wheat acres all up from the March projections. Corn gained over 2 million acres, soybeans up nearly 1.5 million and wheat up 1 million acres.
"If the numbers hold, this would be the second largest corn plantings since World War II and another record year in soybean plantings," said Hart.
An increase in soybean acreage was noted in most of the major soybean-producing states, including Iowa, where a 50,000-acre increase was noted.
"I thought we would see slightly more increase in Iowa than 50,000 acres," said Iowa Soybean Association CEO Kirk Leeds. "Even with global slowdown, we are still seeing strong demand for soybeans and soy meal around the globe. In China, especially, while growth is slowing, there is still growth in demand."
While an acreage increase was reported for Iowa, ISA expects some farmers to vie for prevented planting due to wet conditions and delayed planting.
Corn acreage was increased in 23 states, held steady in 15 and was lowered in 10. The two biggest gainers were Nebraska with 600,000 more corn acres and Iowa with 500,000 more.
Corn stocks on June 1 were up 6 percent from last year and above trade expectations. National soybean stocks were down 12 percent from last year and in line with trade expectations.
"The combination of slightly higher corn stocks, significantly higher corn area, and improving weather conditions will have a strong impact on corn prices, providing additional momentum for price drops in the market," said Hart.
While the soybean area was less than expected, a record acreage is still expected, thus putting pressure on prices.
"Most long-term forecasts I have seen lean toward good growing conditions for the year and downward pressure on crop prices, but some have pointed out the similarities to 1983 and the potential for a recover of La Nina, raising the possibility of a late summer drought," added Hart.
He said livestock prices will affect grain prices also, as higher livestock prices and lower feed costs could help stem the loss of feed demand.
Jennifer Bremer can be reached by phone at 515-833-2120 or by e-mail at email@example.com.