Production down in 2011 Crop Production Summary

By Matt Reese

The weather was frightful around the country last year and it shows in the Crop Production 2011 Summary released by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS). From drought to flooding and everything in between, the nation’s farmers had their hands full in 2011, which was the first year since 2002 that there was a year-to-year decrease in the production of corn, wheat, soybeans, and cotton. The lower production from last year, though, was not enough to boost prices according to Global Commodity Analytics’ Mike Zuzolo.

Corn for grain production is estimated at 12.4 billion bushels, up slightly from the November 1 forecast but 1% below 2010. The average yield in the United States for 2011 is estimated at 147.2 bushels per acre. This is up 0.5 bushel from the November forecast but 5.6 bushels below the 2010 average yield of 152.8 bushels. Area harvested for grain is estimated at 84.0 million acres, up slightly from the November forecast and up 3% from 2010.

Soybean production for 2011 totaled 3.06 billion bushels, down 8% 2010. The average soybean yield is estimated at 41.5 bushels per acre, 2 bushels below last year’s yield. Harvested area for soybeans in 2011, at 73.6 million acres, is down 4% from 2010.

NASS estimates the 2011 all wheat production at 2.00 billion bushels, down 9% from 2010. The all wheat yield is estimated at 43.7 bushels per acre, down 2.6 bushels from last year. Harvested area, at 45.7 million acres, is down 4% from the 2010 crop. Winter wheat seeded area for 2012 is expected to total 41.9 million acres, up 3% from 2011. Approximate class acreage breakdowns are:  Hard Red Winter, 30.1 million; Soft Red Winter, 8.37 million; and White Winter, 3.49 million.

Doug Tenney, with Leist Mercantile in Circleville, pointed out that the January Report typically offers a few surprises and this year was no exception.

“There look to be at least three surprises with all of the numbers today. First would be that corn production was up. Much of the trade was pretty locked into a lower production number with ideas if that took place, March CME corn could reach $6.70 to $7.20,” Tenney said. “The second surprise would be the reality of seeing soybean ending stocks jump up to 275 million bushels from last month’s 230. The recent rally in soybeans from mid-December to mid-January had March CME soybeans up $1.40 from the lows of December. The recent lack of rain and lots of heat in Argentina has been a big factor in the soybean and corn rally the past three weeks. The third surprise, although minor, would be the winter wheat acres of 41.9 million acres, the average trade estimate was 41.0. Producers in Ohio probably are surprised at that number with many reducing wheat acres for 2012 and even making such a bold move for their farms to not plant wheat this past fall.”

The level of corn stocks in the report will also be important moving forward.

“One number is likely to get lost in early trading. The Dec. 1 corn stocks came in at 9.642 billion bushels. It was 241 million bushels above the average trade estimate. But even though it was higher than traders had expected, the December 2011 corn stocks were 415 million bushels below that of December 1, 2011. We all know how tight corn was the past summer in addition to the strong basis levels seen at that time. Corn is not out of the woods yet,” Tenney said. “Early calls are all over the board for Thursday’s opening. The grain floor estimated corn to be down 12-15 cents, soybeans down 20-25 cents, with wheat down 10-15 cents. Some are suggesting corn could be nearly down its 40 cent limit while soybean could be down nearly 30 cents.”

 

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