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Head-scratching US corn planting data is still incomplete
[CHICAGO] American farmers planted a lot more corn than expected this year. But at the same time, they also left way more acres unplanted than analysts predicted. Wait, what?
If you're confused, join the rest of the crop market. The US Department of Agriculture put out two reports Monday that seem to be muddying the waters even more after record spring rainfall in the US created widespread uncertainty over crop plantings.
On one hand came the hallmark World Agricultural Supply and Demand Estimates report. The monthly publication reflects data from the USDA's National Agricultural Statistic Service (NASS). It said American acres were 2.6 per cent higher than the average analyst estimate at 90 million. The number helped send corn futures down 6 per cent on Monday, the biggest one-day loss since 2013.
Meanwhile, the USDA's Farm Service Agency (FSA) said farmers sowed 85.87 million acres, while growers were unable to plant another 11.21 million acres that initially were intended for corn. The FSA's so-called prevented plant figure was sharply higher than both analyst estimates from late last month and the previous record of 3.6 million unplanted corn acres set in 2013.
So why the divergence? It's hard to say exactly, but here are some of the contributing factors:
1. Different data sets: NASS is trying to provide a measure for the whole US corn market, including for those farmers who don't participate in USDA programs. Meanwhile, FSA is specifically reporting on figures given by producers who want to participate in assistance programs. For this reason, NASS figures are often larger than those from FSA.
2. Incomplete data: FSA acreage numbers come out on a rolling basis, based on self-reporting from producers. Because of this, the figure on plantings will likely continue to increase as more farmers file the necessary paperwork. Last year, FSA's certified corn acreage number increased by 627,695 acres from the first report in August to the final one in January.
3. Adjustments: NASS can continue adjusting its corn numbers as the season progresses. The agency uses a combination of tools to arrive at its estimate, including satellite imagery and farmer surveys. It can tinker with the figures as more data becomes available, which is what many traders are expecting will happen this year.
"The disconnect between huge prevent plant acreage for corn and the agency's planted and harvested estimates awaits further explanation –- and likely adjustment," Bryce Knorr, senior grain market analyst at Farm Futures, said in an email.