U.S. farmers are deep into harvests of what will be bumper corn and soybean crops, but adjustments to government estimates for exactly how much was planted months ago are still affecting futures prices.
The U.S. Department of Agriculture on Friday cut its forecasts more than expected for the acres of corn and soybeans farmers will harvest. The move was driven by reduced estimates of acres planted, said Lance Honig, chief of the crops branch of the Agriculture Department’s National Agricultural Statistics Service (NASS).
The lower acreage helped push the agency’s estimate for overall soybean production below analysts’ expectations and in response, nearby soybean futures jumped to their highest levels in over a week.
The late-season adjustments underscored lingering uncertainty about the exact size of crops in the United States, the world’s top grain exporter, following heavy rains in May and June that caused flooding in some areas.
Next week, traders will have another chance to focus on acreage when the Farm Service Agency (FSA), another unit of the Agriculture Department, issues monthly data on crop plantings. However, not every acre will be represented because not all farmers are enrolled in FSA programs.
For each of the past three years, FSA reports in October have shown fewer soybean acres than October reports from the NASS. Corn acres have been higher in the FSA reports for two of the past three years.
The NASS determines its estimates for acreage, which are considered to be the industry standard, through a combination of several methods, including surveying farmers and assessing FSA plantings data.
The NASS receives weekly updates on acreage from the FSA and has seen bigger-than-usual increases in the FSA’s plantings data recently, Honig said. Still, the NASS determined that planted acres had dropped from September.
An FSA spokesman did not immediately respond to a request for comment.
For soybeans, the NASS lowered its estimate for plantings, which typically are finished in June, by 1.1 million acres from September to 83.2 million. Estimated harvested acres also fell by 1.1 million, to 82.4 million.
Some acres are abandoned every year due to bad weather. However, the latest adjustments in the USDA’s forecasts for harvested acres did not reflect increased abandonment rates, Honig said.
Wet weather at planting time made it more challenging to estimate acreage, said Don Roose, president of Iowa brokerage U.S. Commodities.
“I think that’s why the government took until the October report to make those downward adjustments,” he said.
