Yields and Acreage Adjustment Maintain U.S. Corn Harvest Hopes

Introduction

Yields are often the more controversial element of U.S. corn production at this time of year, but a strong acreage adjustment from the government maintains U.S. harvest hopes near record levels despite weaker yields.

Acreage Adjustment

The U.S. Department of Agriculture (USDA) increased harvested corn area by 774,000 acres after a review of acreage registration data collected by USDA’s Farm Service Agency.

• The average trade guess called for a 120,000-acre increase and the top-end guess was 678,000.
• The boost in acreage was larger than expected, with whispers suggesting an even bigger increase.
• This increase is the largest ever back to at least the mid-1990s.

Corn Plantings

The acreage adjustment solidified a 10-year high in corn plantings of 94.9 million acres, boosting corn output slightly from last month to 15.134 billion bushels.

• This offset an expected decline in yield to 173.8 bushels per acre from 175.1 in August.
• USDA’s peg of U.S. corn plantings was up 772,000 acres from the June survey.
• This marks corn’s second-largest planted area increase from the June estimate to final in more than four decades.

Reasons for the Low June Estimate

It remains unclear why USDA’s June estimate for corn plantings was so low this year.

• USDA survey response rates have declined over the years, potentially impacting the quality of June or other estimates.
• The March planting survey also came in higher than expected, suggesting a discrepancy in estimates.
• Final corn planted acres in 2021 were slightly lower than estimated in September, leaving room for potential growth this year.

Soybean Plantings

Analysts had expected a larger increase for harvested soybean acres versus corn, but USDA’s figure landed just 95,000 acres higher than in June.

• The trade has been over-guessing soy plantings all year, including a 4-million-acre miss in June.
• Final soybean plantings have ended up lower than in June in 14 of the last 20 years.

About the Author

Karen Braun is a market analyst for Reuters, focusing on all aspects of the global agriculture markets with a primary focus in grains and oilseeds.

• Karen holds degrees in meteorology and sometimes features her expertise in her columns.
• Follow her on Twitter @kannbwx for her market insights.