USDA reports spark rally for corn, soybeans and wheat.
On Tuesday, June 30, the USDA released two reports. One was for old crop inventories (stocks) for corn, soybeans and wheat as of June 1. In and of itself, corn stocks would be considered somewhat bearish, as the reported number of 5.223 billion bushels, was almost 300 million bushels more than the average estimate of traders. Soybean stocks at 1.386 billion bushels, was pretty much in line with expectations. Wheat stocks of 1.044 billion bushels were higher than expectations.
The real shocker was the reduction in acres for corn. In March, the USDA indicated close to 97 million acres would be planted. Today’s info shows just over 92 million, while the trade expected around 95 million. Soybean acres were up about 300,000 acres from the March report, while the trade expected an increase of more than one million acres. All wheat acres decreased about 500,000 acres from March intentions. It’s when you add up all the acres for the main crops grown in all the states that you notice the missing acres. In March, the USDA projected more than 319 million acres to be planted. With today’s report, they are now less than 312 million acres.
Tuesday’s information is leaving a lot of people wondering where all these acres went. So far the information provided, indicates that more than 7 million acres were not planted this year. This is more unplanted acres than what we saw between the March and June reports last year, when there was widespread flooding.
States with large changes from March to June are:
North Dakota -1,400,000; Texas -1,100,000; Nebraska -700,000; So. Dakota -600,000; Illinois -500,000; Minnesota -450,000; Missouri -400,000. (See chart below)
For now, we’ll work with the info from the USDA, keep an eye on the weather, and look forward to the World Agriculture Supply and Demand Estimates (WASDE) on July 10.