[July 18, 2013]URBANA -- The corn and soybean markets continue
to reflect uncertainty about the potential size of the 2013 U.S.
corn and soybean crops. Over the past month, December 2013 corn
futures have traded in an 80-cent range, and November 2013 soybean
futures have traded in a $1 range as production expectations shifted
up and down. Uncertainty about both acreage and yield prospects has
contributed to the relatively wide trading range, according to
University of Illinois agricultural economist Darrel Good
"The USDA's June Acreage Report showed that producers planted, or
intended to plant, slightly more acres of both corn and soybeans
than indicated in the March Prospective Plantings report," said
Good. "The report also showed that the difference between planted
acreage and expected harvested acreage of corn for grain was larger
than average at 8.244 million acres. On the other hand, the expected
difference between planted and harvested acreage of soybeans was
smaller than average at 810,000 acres," he said.
Additional
information about the likely level of planted and harvested acreage
will continue to be available to the market. The USDA indicated that
it will resurvey soybean acreage in 14 states during July and
reflect any changes in the August Crop Production report. Some
additional acreage information for both corn and soybeans may also
become available through the normal survey process for the August,
September, October and November production reports. Certified
acreage data from the Farm Service Agency will also become available
and should be reflected in the USDA's October production report.
Another source of information about the magnitude of planted
acreage will be available with the FSA reports of prevented planted
acreage. Preliminary estimates are expected next month.
"The estimates of prevented planting are reported by crop and by
state and will be used to judge the potential change between the
June acreage estimates and actual planted acreage," Good explained.
"The problem with using that information, however, is that there has
been only a loose relationship between the magnitude of total
prevented planted acreage and the difference between actual
plantings and the June acreage estimate. In recent history, the
largest prevented planted acreage occurred in 2011, when 9.6 million
acres of all crops were reported as prevented planting. Prevented
plantings of corn were reported at 3 million acres, but total
planted acreage of corn was only 346,000 less than the June acreage
estimate.
"Similarly, prevented plantings of soybeans were reported at 1.45
million acres, but actual planted acreage of soybeans was only
162,000 less than the June acreage estimate," Good said. "For 2009
and 2010, when prevented planted acreage was also large, the
relationship between the magnitude of prevented plantings and the
difference between actual acreage and the June estimate was only
close for soybeans in 2010. For corn, actual acreage in 2010
exceeded June intentions by 320,000 acres even though prevented
plantings were reported at 2.1 million acres," he said.
Given the lateness of the 2013 planting season, reported
prevented planted acreage is likely to be large, Good said. In
addition, some planted acreage has been lost to flooding. As a
result, actual planted and harvested acreage of both corn and
soybeans are likely to be less than the June estimates. The
magnitude of the difference, however, may remain uncertain until
October.
Good said the same factors that have created uncertainty about
planted and harvested acreage of corn and soybeans have also
contributed to early season yield uncertainty.
"Judging from current crop condition ratings, yield prospects at
this stage of the growing season are quite good," he said. "However,
overall yield prospects will be influenced less by developments to
date and more by weather conditions over the next two months as the
crops go through the reproductive and filling stages. Recent weather
and near-term weather prospects are a bit of a mixed bag, with
almost ideal moisture conditions in many areas, but too much
rainfall in some areas, dryness developing in some western areas and
generally above-average temperatures this week. As usual, there are
some differences of opinion about longer-term weather forecasts.
Prospects for moderating temperatures and thunderstorm activity,
however, bode well for yield prospects. The markets will continue to
monitor crop condition ratings for indications of yield potential,"
Good said.
Good concluded that even with harvested acreage less than
currently estimated, prospects for corn and soybean yields near
trend value in 2013 point to large crops and the likely buildup in
stocks during the 2013-14 marketing year.
"Due to the extreme lateness of soybean planting in some western
and northern growing areas, soybean yields may be at more risk than
corn yields," Good said. "Soybean yield uncertainty could persist
later in the season than is normally the case, with new-crop soybean
futures reflecting more production risk than new-crop corn futures."