Acreage maintains projection for good US corn production

The figures for US acreage are always uncertain information for the private sector due to the difficulty of measuring them. However, the acreage did not bring any surprises and was, surprisingly, very close to the planting intention, therefore, being priced by the market and without surprises. Now, the focus is on the month of July with pollination and silking, the data on exports of the old crop that is already well above the USDA projection and the decisions on biofuels. At the same time, the risks from the Middle East, which affect oil, remain and deserve the usual attention.

The US crop has its first effective data for production in 2025, that is, the preliminary data on acreage. The report of June 30th provides this first, more realistic view of planting, no longer being an estimate. In the planting intention, the USDA data showed 95.326 mln acres in the expected planting. However, due to the events after this survey, involving tariffs, it was believed that producers could migrate even more to corn due to fears of market difficulties with soybeans. The acreage has now been updated to 95.2 mln acres, data that will still undergo minor updates until January.

However, as a matter of fact, the number was very close to what was expected and was already fully priced in by the market. So, for corn, in terms of production, now all that remains is the productivity profile. In normal crop situations, USDA only updates its productivity outlook in August, after an effective field survey. So, no change in productivity projections is expected for supply and demand in this July report. The impact of the slightly smaller area is discreet for the production estimated at 401.8 mln tons, a record number.

July begins with strong attention on the weather due to pollination. The weather expectation for July is that rainfall will still be above average in the first half of July, starting to reduce in intensity in the second half. Temperatures should remain normal to above normal. At first, there does not seem to be a problematic situation for the critical phase of defining production in the United States, at least for corn. Crop conditions have improved significantly, with 73% rated good to excellent compared to 67% in the same period last year. We remember that the average productivity in 2024 was a record, with this crop condition, which may suggest a new record with even better conditions.

On the 11th, USDA will update the supply and demand picture based on the new acreage released on June 30. There will be minor changes in this regard. The major adjustment that the USDA is delaying to correct is on the old crop exports, that is, from the current 24/25 business year, which will end on August 30. Weekly sales now total 68.1 mln tons, compared to the estimate of 66 mln in the supply and demand estimate. Actual shipments reached 55 mln tons and, perhaps, the USDA analyst is in line with the projection based on shipments rather than sales, since the latter may end up being transferred to shipments of the new crop. In any case, this is the major data to be observed in this report on the 11th.

Now, two assessments need to be considered this year. The first is that the US government has been taking several actions regarding biofuels in order to make domestic consumption stronger and decrease dependence on imported products. In the soybean complex, this picture seems quite clear, based on the proposal to withdraw tax benefits for the imports of cooking oil, canola, and palm. In the case of ethanol, attention should be paid to the likely increase in the production mandate for the 25/26 cycle, should the corn crop be confirmed at a high level. Ethanol production is at the ceiling of the mandate, and more use in the local summer may require a greater supply ahead. This decision may only be made in September.

The second is the withdrawal of the reduction in retentions in Argentina, now returning to the 12% rate on local exports. Exports recovered in June, perhaps due to this internal tax increase schedule. July has export registrations of 3 mln tons, compared to 4 mln tons in 2024. It seems that July, which has appointments of 1.7 mln tons so far, will not reach the 2024 figure. Perhaps, there is room for Brazil to start placing its supply in the international environment.

Tags: acreage, consumption, corn, planting, US, Production, crop