Corn and soybean acreage could drift lower from USDA’s early estimates, according to Al Kluis with Kluis Commodities.
Speaking at a Minneapolis Grain Exchange press briefing on USDA’s July 9 Crop Production report, Kluis noted, “I think USDA’s acreage number for corn is going to be the highest we see. We could be backing off 500,000 acres to a million acres each for corn and soybeans because of an unusually large area that farmers were unable to plant. I think the acreage numbers are likely to drift lower in the future.”
Kluis believes yields for corn and soybeans will also come under USDA expectations. USDA’s estimate for an average corn yield of 163.5 bushels “could be closer to 161-162 bushels.”
One reason is that more corn acres were planted in areas which traditionally produce lower yields.
USDA’s projected average soybean yield of 42.9 bushels “is high based on current crop conditions and the fact that so many soybeans were planted late,” Kluis said. “I think it’s going to be closer to 41-42 bushels.”
Kluis believes USDA’s estimate of corn usage will also rise “due to the poor quality of last year’s crop. It’s taking more corn to put on the same weight gain.”
Kluis says ethanol margins “have gotten really hurt over the last couple of weeks as we’ve seen crude oil, gasoline and ethanol prices go down and corn prices go up. I think USDA is very optimistic in the amount of ethanol that is going to be produced and the amount of corn that is going to be consumed. I’m skeptical of some of these huge demand projections.”
Corn ending stocks, estimated by USDA at 1.478 billion bushels for old crop corn, dropped to 1.373 billion bushes for new crop, down 200 million bushels from USDA’s June estimate.
Soybean ending stocks for old crop came in close to trade expectations, according to Kluis, at 175 million bushels. Ending stocks for new crop soybeans came in at 360 million bushels.
USDA’s estimate of Canada’s wheat crop was a bit of a surprise, at 20.5 million metric tons, Noted Kluis. “That is certainly larger than I think it really is. Most analysts believe it’s around 18 million metric tons.”