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|March USDA||Avg Estimate||June USDA|
Reports Recap and Analysis:
Every quarter USDA surveys holders of grain. USDA uses this survey to help them fine tune their estimates of year-end ending stocks (August 30). This report also helps the trade determine feed use in the previous quarter. Also out today was the Acreage report. This survey of producers comes after the bulk of planting is complete. There will be further updates to acreage as the year progresses.
June 1 Grain Stocks: USDA found 3.854 billion bushels of corn at the end of the third quarter of the marketing year. This was a bit over the trade guess of 3.722. This implied that the unknown category of usage, corn for feed, was just a little less than expected. USDA may be resistant to lowering its ending stock number on next month’s supply/demand report.
Acreage: The second farmer survey of the year found 91.641 acres planted. This was a small 50,000 acre reduction from their March effort. The trade was expecting a moderate 661,000 increase. This acreage number will not be traded as being bullish. As long as we have these great growing conditions, new crop will still be considered bearish. The key yield setting time of the year, pollination, is just around the corner. There are no weather threats for this process at this time.
June 1 Grain Stocks: 405 million bushels were left over from the fall harvest. This was a little larger than the 378 average guess. This implies the remaining June – August period will not be as tight as feared. For everyone’s focus, the August 30 ending stock number, USDA may not be interested in lowering it much further on next month’s supply/demand report.
Acreage: The 84.839 million acre survey from USDA was a shocker. It represents a steep 3.3 million acre increase over the March number. For those keeping count, this is now a huge 8.3 million acre increase over last year! This tells the trade, in clear language, that we are set for a dramatic change in supply from the current tight situation. In the big picture we really shouldn’t be surprised by this number. You may remember Allendale’s assertion back on the March report that USDA’s total acreage numbers were off. Back then USDA implied only a 1 million acre increase for combined corn, soybeans, and wheat acres over last year. That did not make sense as preventive plant and the inflow from lower CRP acres gave us potentially over 8 million more acres for this year. With today’s Acreage report in hand, the total acreage increase of 4.9 million this year is much more reasonable. Bottom line here is that new crop soybeans can now be considered bearish, just like corn.
June 1 Grain Stocks: Wheat is unique as its marketing year ends on May 31. Today’s Grain Stock number therefore represents the final ending stock number for wheat. USDA was estimating 593 million bushels left over on the most recent supply/demand report. Today’s number, at 590, does not change the old crop picture.
Acreage: The trade was expecting spring wheat acres to decline a little from USDA’s March survey estimate of 12.009 million. Instead, the survey suggested an increase to 12.709. That is quite an increase for this small crop. Helping to balance that increase out a little was a large 330,000 acre decrease out of durum. It now totals 1.469 million. Along with an increase for their estimate of last fall’s winter wheat planting the all-wheat acreage number increased by 659,000 from March. Wheat is mostly taking its cues from corn right now and this adds a little to the negative sentiment.
Original Post and Estimates:
In each of the past five late planted years corn acres increased on the June Acreage report. Other factors, more than planting pace, determine June acreage.
From March 1 to May 15 the potential corn revenue per acre increased by $15. During the time the potential soybean revenue increased by $22 per acre.
Corn planted acres are expected to increase 385,000 from USDA’s March Prospective Plantings survey. This is the fourth largest acreage in modern times.
Soybean acres are expected to increase by 1.711 million acres. This is a record soybean planting.
Wheat acres are seen 194,000 lower than the March survey. A reduction in spring wheat, of 151,000 acres, was responsible for most of the change. This is the second lowest acreage in 40 years.
Allendale recorded a webinar and discussed these findings in full detail. View the webinar here.
Quarterly Stocks & Prospective Plantings due on 06/30/14
Prospective Plantings in million acres
USDA 2014 Allendale
Corn 91.696 92.081
Soybeans 81.493 83.204
All Wheat 55.815 55.621
Winter Wheat 42.007 41.961
Hard Red 30.200 30.183
Soft Red 8.430 8.456
White 3.350 3.322
Durum 1.799 1.802
Other Spring 12.009 11.858
Hard Red 11.300 11.156
White .709 .702
Quarterly Grain Stocks in billion bushels
06/13 03/14 Allendale
Corn 2.766 7.006 3.646
Beans .435 0.992 .344
Wheat .718 1.056 .593Filed under Nelson's Notes | Comment (0)