On Friday, USDA-National Ag Statistics Service will release its June acreage report. While this report is typically a market mover and a data dump that usually influences markets throughout the summer, analysts say this year’s report won’t matter much.
The March prospective plantings on corn acres was 92.8 million. The USDA World Ag Outlook board in June, which looks at a separate data set, took it down to 89.8 million acres. And heading into Friday’s report, the average trade guess according to Reuters, 86.662 million. Still Pro Farmer analysts say there’s no way to tell what the acreage report number will be because of when the survey used to gather the data was conducted.
“Some of the survey work that is being done right now is suggesting a 10% drop in acres from the 92.8 million for corn planting intentions that were reported by USDA back in March,” says AgriTalk host Chip Flory. “Could we take 10% of those acres off? 9.2, 9.5 million acres? Yeah, I think that is a possibility.”
According to Pro Farmer editor Brian Grete, there’s a chance USDA-NASS releases an acreage estimate that is lower than 89.8 million acres, but he also says there also risks that the number comes in above 89.8 million acres.
“Let's keep in mind the World Board is not the estimating agent,” he told AgriTalk host Chip Flory. “So [we’re discussing] two different procedures here; model-based versus survey-based.”
According to Pro Farmer senior analyst Jeff Wilson, Friday’s acreage estimate is “dated.” The survey was conducted the first two weeks of June and includes acres farmers intended to plant. The likelihood some of those intended acres were ultimately rained out is high.
“We just don't have enough information this time around,” he said referring to the market’s need to know the full picture of prevent plant acres.
Flory agreed. “This this Acreage report that we're getting on Friday is junk,” he said. “I can only assume that there is going to be a re-survey for the August Crop Production report. That will be a better number."
Grete is also confident there will be a re-survey, and likely in key objective yield states.
“That hasn't always been the case, sometimes it's been some of the fringe states where they re-survey,” he explained. “But when you look down the list of corn and soybean plantings and where they were, just the states that were under 95% on corn and states that we're under 80% on soybeans as of last Sunday, and those are objective yield states. Very key and critical states, not only from an acreage standpoint, but are also our highest yielding states.”
Beyond a re-survey, the market will have to wait for the World Board to release certified acreage from reports from local Farm Service Agency (FSA) offices.
“I think the number that the market really needs is FSA certified acreage, which comes in mid-August, the same day as the crop production report,” Wilson said. “But even that's going to be an incomplete because that's just the initial batch. And then it comes mid-month, every month thereafter, September, October, and so on until January.”
According to Grete, the markets could see a bearish pull back in response to Friday’s report, but it won’t last long.
“Ultimately, I think that we're headed higher in this market whenever that comes,” he said. “It may not be until more late summer or fall timeframe as we go through the process. We've seen this in the past, 1995 is a year when we rallied pulled back and then rallied again. Then in 1993 the major flood year. That's one that was a late discovery process by the market and it took some time and we rallied through fall. I think that we could see something similar to those price patterns. But who knows, this is a very historic year, so the market’s making up the rules as it goes here.”