Ag News

June 30 USDA Reports Surprise Markets

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USDA’s much-anticipated June 30 Acreage and Grain Stocks reports are behind us. Once again, they proved to be a market-moving event. While more questions still circle in terms of final yields, the reports did at least offer some a positive market outcome immediately following the reports’ release.

“The good news is we didn’t pull the plug on the prices,” says Jerry Gulke, president of the Gulke Group. “Prices did not collapse in corn with more acres, and the price of beans were much higher in response to a non-event for soybean acres.”

Here are the highlights from the Acreage report:

  • Soybean acres came in at a record-high 89.5 million, up 7% from last year. Soybean harvested acres are also precited to be up 7% from 2016, estimated at a record-high 88.7 million acres.
  • Corn acres are estimated at 90.9 million acres, down 3% from last year. Farmers expect to harvest 83.5 million acres of corn for grain, down 4% from last year.
  • All cotton acres for 2017 are estimated at 12.1 million acres, 20% above last year.
  • All wheat planted area for 2017 is estimated at 45.7 million acres, down 9% from last year. This represents the lowest all wheat planted area since records began in 1919.

Key findings in the Grain Stocks report include:

  • Soybeans stored totaled 963 million bushels, up 11% from June 1, 2016. On-farm soybean stocks were up 18% from a year ago, while off-farm stocks were up 7%.
  • Corn stocks totaled 5.23 billion bushels, up 11% from the same time last year. On-farm corn stocks were up 15% from a year ago, and off-farm stocks were up 6%.
  • All wheat stored totaled 1.18 billion bushels, up 21% from a year ago. On-farm all wheat stocks were down 3% from last year, while off-farm stocks were up 28%.

“USDA raised both corn and soybean acres from its March 31 estimates,” Gulke says. “Corn acres came in 1 million acres higher than trade guess. This opens up potential for USDA to lower corn yields due to all the problems this crop has had, but still keep supplies adequate—but not burdensome or tight.”

For soybeans, he says, this does tighten up the outlook. “Soybeans certainty aren’t at the surplus levels we thought they were at a month ago,” he says.

As for the Grain Stocks report, Gulke says USDA increased corn stocks, despite good feed demand. He says the soybean stocks numbers suggest demand is excellent, despite of the excessive South American soybean supply.

Market trade will only be open for half a day on Monday, July 3 and closed for July 4. This means trade could get volatile, Gulke says.

Gulke says farmers should be ready for the July 12 World Agricultural Supply and Demand Estimates Report (WASDE), as that report will reflect these acres and stocks.

His advice for farmers with unpriced grain? “Let this thing run and see what happens,” he says. “Don’t do anything with these beans or corn until you have more information.”

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