Anyone despairing that old-fashioned fundamentals ride drag in the upended commodity markets had to smile last Tuesday. USDA announced corn producers had planted 2 million more acres than previously estimated; nearby futures plummeted limit-down.

If producers have in fact planted 87 million acres, as last week’s report suggests, that would represent the most acres planted to corn since 1946 (the record year was 2007).

Besides the additional acres, crop condition is running ahead of last year, with the expectation that yields may move higher than previous estimates.

At the same time, USDA’s Grain Stocks report last Tuesday pegged corn stocks (all positions) June 1 at 4.27 billion bu. That’s 6% more than a year ago.

Soybean acres are up, too. There are 77.5 million acres planted, up 2% from last year, according to the USDA report. The resulting 76.5 million acre harvest area would be record high.

Like taxes, though, there’s always a cloud among the sunshine. In this case, increased supplies could prompt Washington to up the ante for ethanol.

“…the greater availability of corn supplies makes it more likely that the EPA will increase the ethanol blend rate from the current 10% to 12% or 13%, effective Jan. 1, 2010,” says Terry Francl, senior economist with the American Farm Bureau Federation. “That will in turn utilize some 400 to 500 million more bushels of corn in the 2009/2010 crop year and reduce corn ending stocks by 300 to 400 million bushels. It is also important to remember that about one-third of the corn that is utilized as ethanol comes back as distillers dried grain, which replaces corn and some protein meal.”