U.S. farmers seeded more acres with corn than they indicated in March as prices rose to a record, the government said. Soybean acres were reduced as the worst flooding in 15 years interfered with late-seeding plans.

The U.S. Department of Agriculture’s acreage estimates were more than analysts expected, after floods inundated large areas of the Midwest in mid-June. Corn and soybean futures have surged in the past year on increased demand for crops used to make biofuels and animal feed. The USDA on June 10 said global corn reserves will fall to a 24-year low by Aug. 31.

“We won’t know what the real damage is to this year’s crop until after the harvest,’’ which begins in October, said Al Ambrose, vice president of oilseed products for CHS Inc., a cooperative based in Inver Grove Heights, Minnesota. The U.S. may be facing a “serious supply issue,’’ he said.

Corn futures for December delivery fell the exchange limit of 30 cents, or 3.8 percent, to $7.57 a bushel at 10:29 a.m. on the Chicago Board of Trade. The most-active contract, which rose 4.2 percent last week and reached a record $7.9925 on June 27, has more than doubled in the past year as rising demand for ethanol and livestock feed erodes inventories.

Soybean futures for November delivery fell 18.75 cents, or 1.2 percent, to $15.4075 a bushel in Chicago. Before today, the price had gained 92 percent from a year earlier, reaching a record $15.865 a bushel on March 3.

More Corn Acres

About 87.3 million acres were planted with corn, the USDA said in today’s report. That’s up 1.9 percent from a March forecast based on farmers’ intentions and down 6.7 percent from 93.6 million acres sown last year, the most since 1944. The average estimate of 18 analysts in a Bloomberg survey was for 85.16 million acres.

Soybeans were planted on 74.533 million acres, down from a March forecast of 74.793 million, the USDA said. That would be up 18 percent from 63.63 million acres planted last year, a 12- year low. Analysts expected 74.394 million acres.

Today’s report is based on a survey of 87,000 farmers during the first two weeks of June, after most of the crops had been planted. A special survey in which 1,150 farmers in flood- affected areas was conducted last week to assess the impact of water damage on planted and harvested acreage. A more extensive assessment of any flood damage will be included in the Aug. 12 crop production report after further surveys in July.

Harvested Acreage Estimates

The USDA estimated the number of corn acres that will be harvested at 78.9 million, up from 78.8 million projected on June 10. That’s 90.4 percent of total acres planted, which is the same as the average for the prior eight years and less than 92.4 percent last year. Harvested acreage fell to 85.9 percent of planted acreage after the flooding in 1993.

Soybean harvested acreage was forecast at 72.1 million, 96.8 percent of this year’s planted acreage. Farmers harvested 98.7 percent of the planted land last year and since 2000 have harvested 98.4 percent of the total seeded.

“I don’t think anybody knows with certainty, including the government, how many acres will actually be harvested or planted this year,’’ said Randy Mittelstaedt, a grain analyst for R.J. O’Brien & Associates in Chicago. “Who knows what record prices will do to farmers’ plans for harvesting crops?’’

The flooding, which devastated crops in Iowa and in surrounding states this month, may end up reducing the corn harvest by more than 1.7 million acres and soybeans by about 1.4 million acres, according to calculations based on USDA historical averages and the early June survey.

The USDA also surveyed farmers about the use of genetically modified seeds. About 92 percent of the total soybean acreage was planted with gene-engineered seed this year, up from 91 percent last year, the government said. Biotech-altered corn acreage rose to 80 percent from 73 percent last year.

Grain Inventories

The USDA also released quarterly estimates of grain stockpiles.

Corn inventories left over from last year’s record harvest totaled 4.03 billion bushels as of June 1, up 14 percent from a year earlier when supplies fell to a three-year low, the department said. Analysts expected 3.929 billion bushels, on average. Most of this year’s crop will be harvested in October and November, about two weeks later than usual because planting was delayed by rains.

“Corn supplies are at least 100 million bushels higher than people expected,’’ said Greg Grow, director of agribusiness for Archer Financial Services in Chicago. “This report indicates high prices are rationing demand.’’

Soybean stockpiles left over from last year’s harvest plunged 38 percent to 676 million bushels as of June 1 from a record 1.092 billion a year earlier, the USDA said. Fourteen analysts in a Bloomberg survey expected 677 million bushels, on average.

Last year’s corn crop was valued at $52.1 billion, followed by soybeans at $26.8 billion, government figures show. Wheat was in fourth place, behind hay, with a value of $13.7 billion.

SOURCE: Bloomberg.com

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