USDA surprised everyone with its year-end crop production report last week, estimating a record corn crop of 13.2 billion bu., 9% more than the previous year.

Corn futures prices plummetted with the news, limit-down when the report was issued Tuesday (down 40¢/bu. on the Omaha cash market), another 8¢ Wednesday, then sideways to lower the rest of the week, especially on the front-end months. In turn, feeder-cattle futures gained on the week and helped bouy gains in live cattle.

Though the report provides a welcome price reprieve in the cattle markets, it comes with a huge question mark. Given the late start to the planting season and sloppy harvest conditions this fall, there are still a significant number of unharvested acres. Analsyts with the CME Group Daily Livestock Report estimated as much as 5% of corn acres – about 4.3 million acres – have yet to be harvested. That fact has plenty of folks wondering how it is that USDA raised its final yield estimate 3 bu./acre from the November estimate.

For its part, the same day it issued the report, USDA announced it may re-poll producers who had unharvested acres prior to the Jan. 12 report and may release updated acreage, yield, production and stocks estimates in its March 10 “Crop Report.”

According to the National Agricultural Statistics Service, “When producers were surveyed in late November and early December, there was significant unharvested acreage of corn in Illinois, Michigan, Minnesota, North Dakota, South Dakota and Wisconsin; and significant unharvested acreage of soybeans in Georgia, North Carolina, South Carolina and Virginia.”

Even with the unexpected increase in corn production, last week’s “World Agriculture Supply and Demand Estimates” raised expected corn prices on both ends of the range, anticipating season-average prices of $3.40-$4.00/bu. for 2009-2110.