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30

June Acreage & Quarterly Grain Stocks

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Acreage:

The USDA surprised traders with an increase in corn acreage by 890,000 vs. expectations for a 93,000 acre reduction from the March estimate. The largest increases came from North Dakota (+400,000), Nebraska (+250,000), Michigan (+200,000) and Iowa (+200,000). Cuts were seen in Illinois (-200,000) and Indiana (-100,000) with smaller cuts in Ohio, New York, and North Carolina.

Soybean acreage increased just 31,000 vs. trade expectations for a 268,000 acre increase from the March estimate. The largest increases came from Missouri (+350,000), North Dakota (+300,000), and Illinois (+200,000). The largest reductions came from Kansas (-250,000), Indiana (-100,000), and Louisiana (-100,000).

Wheat acreage also surprised traders, coming in 402,000 below March intentions vs. trade expecting an 11,000 acre increase. Winter wheat acreage increased 92,000 but those increases were offset by a 409,000 acre reduction in spring wheat seedings and an 85,000 acre drop in Durum.  

 

Grain Stocks:

Corn stocks in all positions came in at 5.225 billion bushels, 112 million above the average trade guess of 5.123 billion.

Soybean stocks came in at 0.963 billion bushels, 20 million below trade expectations of 0.983 billion.

Wheat stocks came in at 1.184 billion bushels, 47 million above trade expectations for 1.137 billion.

 

Take Aways:

Today’s USDA reports were taken as bullish pushing soybean and wheat futures into strong closes.  Traders failed to get the anticipated increase in soybean area, putting more pressure on summer weather to maintain current carryout expectations. Smaller than expected spring wheat acreage added fuel to the already extended Minneapolis wheat rally, also pulling the entire wheat complex higher with it. We anticipate Roach Ag Sell Signals in KC & Chicago wheat next week.

Corn stocks and acreage were fundamentally bearish but the market shrugged off the report data, pulling prices higher along with strong performance in wheat.

Now that the report is behind us we will go back to trading weather with a better idea of how yields need to perform to keep up with record demand. With soybean and corn crops further behind than normal, we have a lot of weather still yet to trade in the next month. 

 

USDA June Acreage (mln acres)
 
USDA June
2017
Average Trade Est.
Range of
Trade Est.
USDA
Mar 2017
Corn
90.886
89.903
89.0-91.0
89.996
Soybeans
89.513
89.750
88.5-90.5
89.482
Wheat
45.657
46.070
45.7-47.4
46.059
All Winter
32.839
32.830
32.5-33.8
32.747
Spring Wheat
10.899
11.206
11.0-11.6
11.308
Durum Wheat
1.919
2.002
1.9-2.2
2.004
 
U.S. Quarterly Grain Stocks (bln bu)
 
USDA
June 2017
Average Trade Est.
Range of
Trade Est.
USDA
June 2016
Corn
5.225
5.123
4.690-5.360
4.711
Soybeans
0.963
0.983
0.870-1.119
0.872
Wheat
1.184
1.137
0.968-1.185
0.976
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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.