USDA's US corn projections are still vulnerable to lower acreage and lower yield
June 28, 2024
Key Observations:
Today USDA published its annual survey-based Acreage report. Based on its sampling, USDA now estimates U.S. farmers will plant corn on 91.5 million acres. This estimate is a 1.5-million-acre upward revision from the figures in the USDA’s latest WASDE report (June 12). USDA projects 91% of this planted acreage will be harvested, a 1.3-million-acre increase from the WASDE figure.
Assuming no other alterations to USDA projections for supply or demand in the forthcoming 2024/25 crop year, the acreage revisions imply a 242-million-bushel increase (+12%) in USDA’s projection for U.S. corn stocks on 1-Sep-2025.
Two facts should be borne in mind: (1) USDA’s June Acreage projections have overestimated actual corn planted acreage in 14 of the past 20 years (70% frequency), (2) USDA reports that when its 2024 Survey ended on June 16, 3.36 million planned corn acres remained to be planted.
Moreover, USDA’s supply projections rely on the assumption of trend yield: 181.0 bushels per acre. With 94% of U.S. corn acreage using one or more forms of biotechnology for crop protection against insects, herbicides, and other threats, this base case is certainly reasonable. However, given recent deterioration in cash prices and the high likelihood of hot and dry growing conditions this summer, the risk of lower yield on lower actual harvested acreage is non-trivial. A yield 3% below trend (like in 2019) on 1 million fewer acres would cut projected stocks by 585 million bushels (-25%).
Source: USDA, Blacklight Research.
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