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June Acreage Report: Likely Not the Last Word

Jun 30, 2015

In its June Planted Acreage report, USDA updated 2015 acreage to 88.9 million for corn, down 2 percent from last year, and 85.1 million for soybeans, up 2 percent from last year and a record. This compares with March intentions of 89.199 and 84.635 million, respectively. The average trade estimate ahead of the report was for slightly more corn, at 89.292 million, and 85.171 million acres of soybeans. But this is by no means the last word; even well ahead of USDA’s June 30 acreage report, many market players were discounting the data on the basis of both history and weather.

Based on marketing years 1996-2014, final corn acreage, issued in January, has differed from the June report by as little as 28,000 acres and as much as 2.01 million. On average, corn has changed by 582,000 acres. The smallest change in soybeans was 32,000 acres and the largest, 1.46 million, with an average of 698,000.

The June estimate tends to overestimate corn acreage because it was above the final number in 15 of the past 20 years and below in just five. Soybean acreage also is above the final number more often than below—13 years versus seven. Measures of accuracy are admirable for these major crops, however, a root mean square error of less than 1% for corn and 1.1% for soybeans and a 90 percent confidence level of 1.5% and 1.9%, respectively.

This year’s planting, which is running behind average for soybeans, could mean soybean prevent-plantings run a bit higher than normal. As of June 28, all corn acres were reported planted in the 18 states USDA reports. Six percent, or 5 million acres, of soybeans were still unplanted – and water was still standing in fields in a number of states where rainfall has been excessive. Kansas and Missouri, in particular, have seen rainfall of as much as 600 percent above average. Missouri farmers have planted only 62 percent of the soybeans they intended this year and it is likely some soon will become prevent-plant. Kansas is at 86 percent.

Nationally, prevented acreage of major crops has totaled as much as 9.6 million (in 2011) and as few as 1 million (1997) and averaged 3.6 million acres over the past 20 years. On average, corn and wheat each accounted for 34 percent and soybeans, 21 percent. Using history and the March intentions report as a guide, Missouri and Kansas could see a low of 372,000 acres to a record 1.9 million soybean acres left unplanted, with an average of 1.1 million. 

On the flip side, it is worth noting that the northern Corn Belt, including the Dakotas and Minnesota, saw favorable planting weather this year. Given they have a history of greater frequency of prevent-plant acres, this may actually lower the number total this year.  The deadline for acreage reporting at FSA is July 15 but the numbers aren’t typically compiled until late summer/early fall.

Finally, keep in mind that USDA’s survey was done in the first two weeks of June, with four to even six weeks of planting still permitted by crop insurance late-planting-period rules. That’s a primary reason many market participants are taking this report with a grain of salt. Even USDA believes they could change: It will resurvey Arkansas, Kansas and Missouri soybean acreage, as well as Kansas grain sorghum and Texas cotton, in July. Changes will appear in the Aug. 12 crop report.