USDA Planted Acres, Biofuels and Dry Forecast
Update for July 1st, 2021
Bullish USDA Planted Acreage and Quarterly Stocks reports were announced yesterday. Planted corn acres are up from 90.81 million in 2020 but fell within the low range of the trade estimate at 92.7 million acres planted vs the expectation of somewhere higher in the 92-to-96-million-acre range. What is especially important to note is the location of where some of these additional corn acres are located. Both North and South Dakota had notable increases in corn acres planted this year over those planted in 2020, but they are also suffering through significant drought conditions and the weekly crop ratings continue to reflect the severity of the situation in that region of the country. Just this week the GD/EX category for corn in South Dakota fell by 10 points to just 24%! Data from the report shows that in 2020 South Dakota planted 4.95 million corn acres, this year that has number has increased to 6.0 million acres. North Dakota planted 1.95 million corn acres last year and this year data shows the state has planted 3.6 million corn acres. It’s reasonable to assume that these additional acres are not going to make the impact they could during a “normal growing season”. Also remember that the Dakota’s are not alone, much of the western Corn Belt and Northern Plains are dry, for the week ending June 27th, 90% of the topsoil in South Dakota was rated short or very short of moisture, Minnesota was 75% and 66% in North Dakota. These conditions are certain to deteriorate further as the outlook calls for a hot and dry weather pattern for the next 10-14 days across the region. Quarterly Stocks has added to the bullish trade with current corn stocks now -18% lower than a year ago and -30 million bushels below expectations.
The trade had been looking for planted soybean acres to come in around 89 million but were surprised when it was reported at 87.555 million. Quite an increase from the 83.084 million soybean acres planted in 2020 but like corn, many of these additional acres are located in the parched Dakota’s.
The biofuel’s industry is doing what it can to be recognized as a “lower-carbon bridge to an electric car future.”(Reuters) A group of bipartisan Farm Belt lawmakers are working together on Bills that are designed to boost the U.S. biofuel’s industry. Next Tuesday 3 bills will be introduced that would raise public investments in to the biofuels industry in an effort to combat the push for electric vehicles from the White House. U.S. Senator Joni Ernst (R-IA) and Amy Klobuchar (D-MN) will co-introduce a funding bill that would provide $1billion in grants for pumps and storage tanks that would be used for biofuels like corn ethanol. A second bill the pair plan to introduce asks for a $200 per-car tax credit for automakers that offer flex fuel vehicles that can virtually run on any blend of fuel.
Frost has hit several agricultural areas in Brazil and Paraguay this week. Corn, coffee and sugar cane growing areas have received multiple nights of cold temps already with yet another night of cold temps forecast for tonight. Farmer selling in Brazil has been at a stand-still for quite some time due to production uncertainty with the countries second corn crop, due to many months of dry conditions. Exports of corn from neighboring Paraguay have helped to alleviate Brazil’s short supplies but the damage from the frost this week has been “harsh” and likely has caused some crop losses in those growing regions as well. (Reuters)
So, while the western Corn Belt and Northern Plains bake in the hot, dry weather the eastern Corn Belt and southeastern U.S. continue to receive plentiful precipitation and favorable temps. Successful Farming describes the 2021 growing season as a tale of two Corn Belts with a possible crop disaster forming in the west while nearly perfect conditions persist in the east. The 6 - 10 and 8 – 14-day outlooks from NOAA are shown in the maps below followed by the GFS and EURO weather models that run through July 10th.