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All the worries about cold, wet weather and flooding in the Great Plains and the Ohio River Valley have pretty much been laid to rest. The US corn crop is in the ground on an estimated 92.3 million acres, up from 88.2 million acres last year, and the second highest total ever. The March estimate of 92.2 million acres was almost right on the money.

And speaking of money, the latest acreage figures from the US Department of Agriculture should ease corn prices somewhat. That could tend to push prices up, for both corn and wheat, which are down 15% and 12% respectively this year.

Some analysts had been expecting corn planting to be down to around 90.5 million acres as a result of flooding along the Missouri and Mississippi Rivers. It appears that in some states, like Ohio, Indiana, and Illinois where the flooding came early, farmers were able to get their crops in the ground a little later. Illinois corn acreage planted is down 100,000 acres from last year, but still over 12 million. Iowa is up by 800,000 acres over last year. Nebraska is up by 850,000 acres. Even North Dakota, where flooding continues, is up by 250,000 acres.

The not-so-good news is that stockpiles fell dramatically. On March 1st, the USDA reported 6.5 billion bushels of corn in stocks. On June 1st, that number had fallen to about 3.7 billion bushels. Last year, March stocks totaled 7.7 billion bushels, falling to 4.3 billion bushels in June.

Wheat stocks are also lower, from 1.1 billion bushels in March to 730 million bushels on June 1st. Last year the March total was 1.4 billion bushels, falling to 976 million in June. Wheat acres planted total 56.4 million, up from 53.6 million last year.

Initial reaction in the corn market will certainly be to send the price down by the $0.30/bushel limit within minutes of market open today. Wheat prices are not likely to tumble as far and as fast, because stocks are so precarious. But the re-entry of Russian wheat on the global market will put downward pressure on wheat prices in the days to come.

The PowerShares DB Agriculture Fund (NYSE: DBA) is down nearly -2% in early trading this morning, to $31.94, in a 52-week range of $23.61-$35.58. The Market Vectors Agribusiness ETF (NYSE: MOO) is down about -0.3%, to $53.45, in a 52-week range of $35.62-$57.93. DBA is an entirely commodities futures-based fund, while MOO includes equipment makers, fertilizer companies, and food processors.

Paul Ausick