Blogging by the Bushel
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This morning it’s all about the latest FSA acreage dump and the acreage data cast a spell on the trade once again overnight. The FSA prevent plant, and failed acres report gave the market a shock last month, but the trade was on the lookout this month. The numbers can look a little shocking, but you have to remember that the FSA is a component of the USDA, but typically there is no historical correlation to the final NASS numbers that the market uses to get your final production, carry-outs etc. The only real rule of thumb seems to be that NASS is typically 3% inflated from the FSA numbers. Not all farmers enroll in the program and are timely and totally efficient in reporting acres. But the FSA still does their monthly data dump to give the market a look at what has been compiled.

FSA published the corn prevent plant acres at 3.572 million, which was slightly higher than 3.411 million in the August dump.  “Certified” Planted Acreage under the FSA data moved up sharply as more farmer acres were tallied, seen at 91.4 million vs. 88.8 million.  Analysts estimate roughly 3% of US acreage is not certified; bulls take this to mean there were roughly 94.0-94.5 million planted corn acres, which would be lower than the 97.4 million used in the Sept NASS crop production report.  Bears will point to the potential for more certified acres to surface in the October update due to the late planted crop, as well as the ample carryout expectations still seen even assuming a drastic reduction in planted acreage

Monday evenings Crop Progress data after the close offered no major surprises. The USDA reported a 1% decline in corn conditions, though this is no longer the highlight with 97% of the crop seen in the dough stage.  Instead, traders focused on the harvested tally – the USDA published a 4% national yield vs. 10% average, but state-by-state tabulations in the delta and south uncover about 620 million bushels have been harvested to date, helping to refill depleted cash corn pipelines.  There were reports of further basis declines in the east as harvest slowly marches north, and basis still generally has a defensive feel.  Yield reports generally remain in-line with or better than expected.

The soybean market continues to be on the defensive as traders interpret the FSA acreage data and worry about new crop supplies. The FSA pegged planted and failed acres as reported to them at 74.659 million acres up 2.599 from August for Soybeans. Prevent plant acres on soybeans were 1.687 million acres up 68,434 from August.

National good/excellent rating was down 2% to 50%; this is the 2nd worst conditions rating in the last 10 years. Both Illinois and Iowa showed a small improvement, with larger losses seen in Minnesota, Missouri, Ohio and South Dakota. USDA said the percentage of fields dropping leaves was 26%, down from 35% on average, with maturity especially slow in Illinois and Minnesota at just 7%. General consensus on early yields continue to be average to above average as it starts to pick up steam and move north.

However, that said, arguably the most surprising numbers in the dump this month were not the corn and bean numbers, but the wheat acres. Failed acres in wheat jumped from 667k in August to 2.06 million this month. Failed acres were acres that were planted, but then reported to the FSA as failed. Prevent plant acres jumped from 585k in August to 1.97 million acres this month. These acres, are what were reported to insurance company’s as un-plantable before the prevent plant date. 1.66 of those acres came out of North Dakota.

Meanwhile any rallies continue to be capped from huge amounts of wheat starting to move north across the border from Canada. The crop up north is shaping up to be a record. The USDA pegged winter wheat planting at 12% this afternoon, up from 5% last week and in line with the long term average. Meanwhile in the northern plains, spring wheat was pegged at 90% harvested up from 80% last week. The general consensus is that yields remain strong, but test weights and proteins remain somewhat disappointing. Rains are continuing to move across areas of HRW country this morning with more of the same expected over the next week to 10 days. This will give winter wheat farmers great incentive to plant this fall, and should increase acres yr/yr.

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