Acreage, stocks data up next for cropsAcreage, stocks data up next for crops
Analysts expect USDA report to show plenty of grain stocks, but wild card for acreage will be effects of wet weather.
June 26, 2015
THE U.S. Department of Agriculture releases its planted acreage report on June 30, and analysts, on average, expect more corn and soybean acres than what USDA put out in its March report.
However, what the report will not show is how many corn and soybean acres were not planted because of the abundant rain this spring and early summer.
"As of early June, the vast majority of producers in Missouri and Kansas still had plenty of time to plant. Therefore, based on the timing of the survey and the exact language, we do not expect any wet planting influence to be shown on Tuesday's report," said Rich Nelson, chief strategist at Allendale Inc. "USDA won't address late planting in acreage until August and then again in October."
A farmer survey Allendale conducted led the firm to conclude that farmers planted 91.742 million acres of corn this spring and 85.105 million acres of soybeans.
The corn estimate was largest in a Reuters poll of analysts, while Allendale's soybean estimate was in the middle of the range.
The Reuters poll put average corn acreage at 89.292 million, up from the March estimate of 89.199 million but down from 90.597 million acres in 2014. Soybean acreage averaged 85.171 million, compared with the March estimate of 84.635 million acres and 83.701 million acres in 2014.
Farm Futures, an affiliated publication of Feedstuffs, estimated corn at 88.45 million acres and soybeans at 83.76 million acres.
Also on Tuesday, USDA will release its quarterly "Grain Stocks" report, with the Reuters poll pegging corn, on average, at 4.555 billion bu., soybeans at 670 million bu. and wheat at 718 million bu. The year-ago numbers were 3.852 billion, 405 million and 590 million bu., respectively.
Allendale expects June estimates of 4.518 billion bu. for corn stocks and 662 million bu. for soybean stocks. Farm Futures expects 4.498 billion bu. for corn and 664 million bu. for soybeans.
"The real trade focus will be on soybeans," Nelson said. "As we look for a June-August soybean disappearance from 355 to 365 million bu., we suggest USDA will be forced to lower its current Aug. 31 estimate (of 330 million bu.) for ending stocks. Tuesday's report could do a lot to change that.
"At this time, it appears the June 1 corn stocks number will provide us with adequate supplies to finish out the crop year," he said.
Custom harvesters entered Kansas wheat fields over the past week and found that late-season rain helped the crop recover from drought and freeze damage earlier in the growing season.
Kansas wheat had better yields and test weights than what the harvesters found in much of Texas and Oklahoma, and forecasts for hot, dry weather during the week should allow for rapid harvest progress.
"The weather has been pretty much perfect: windy and hot," said harvester Janel Wolf, whose crew has been cutting near Bazine in western Kansas since June 22.
Combines moved more slowly than preferred because of green stems on the wheat plants, she said. The grain, however, is ripe and ready to be harvested.
Yields of 40-50 bu. per acre have been common, with test weights of 59-62 lb., Wolf said.
In southern Kansas near Kiowa, wheat yields were lower, at 20-35 bu. per acre, with "pretty poor test weights," harvester George Stolzenburg noted.
Weeds have not been an issue yet but could become a problem later if the rain in the near-term forecast arrives, he said.
Chad Brink, who drove to Dighton, Kan., on Thursday from Helena in north-central Oklahoma, said the Oklahoma fields produced 25-45 bu. per acre with test weights of 50-60 lb.
"A lot of weeds were coming up," Brink said.
Harvest was moving quickly in northern Oklahoma, where hot, dry weather has firmed up fields and dried down the grain.
Harvester Mike Strunk said yields remained at 35-40 bu. with test weights of 53-56 lb. throughout the week. Strunk expected to be in western Kansas by the weekend.
As of June 21, USDA reported that the Texas wheat harvest was 64% completed versus the average of 64%, Oklahoma was 58% completed versus the 73% average and Kansas was 8% completed versus the 33% average.
While the hard red winter wheat harvest gained traction, plentiful rain in the Midwest slowed the soft red winter wheat harvest. The Illinois crop was 3% cut as of June 21 versus the 29% average, and Indiana's crop was 5% cut versus the 20% average.
USDA has forecasted Texas wheat production at 120 million bu. with an average yield of 32 bu. per acre; this compares with 2014 production of 67.5 million bu. at a yield of 30 bu. per acre.
Oklahoma production is projected to be 114.8 million bu. with an average yield of 28 bu., compared with 47.6 million bu. and a yield of 17 bu. last year.
The Kansas crop is forecasted to be 314.5 million bu. with an average yield of 37 bu., compared with 246.4 million bu. and 28 bu. per acre in 2014.
Weekly corn and soybean export sales declined in the latest week, but the numbers were better than what is needed on a weekly basis to meet USDA's projections for the marketing year.
USDA's weekly export report put wheat sales at 16 million bu. (Table) — also more than what is needed to meet the projections. Taiwan, Mexico and Japan were the leading buyers. New-crop wheat sales of nearly 48,000 bu. were led by Italy.
Old-crop corn sales of 19.6 million bu. were down 21% from a week earlier and missed trade forecasts in a Reuters survey by a small margin. Japan, South Korea and Colombia were the leading buyers. New-crop business of 11.7 million bu. topped forecasts, led by Mexico, unknown destinations and Taiwan.
Old-crop soybean sales of nearly 4.4 million bu. were down 11% from the week before and matched forecasts, with Mexico, unknown destinations and Japan as the leading buyers. New-crop business of about 7.4 million bu. was down from a week ago and missed forecasts, with unknown destinations, Mexico and Japan as the top markets.
USDA reported soybean meal export sales of 106,300 metric tons for the 2014-15 crop year, up 11% from the previous week, led by Colombia, Venezuela and Canada. New-crop sales totaled 210,500 mt and were led by Mexico and Spain.
Sorghum sales of nearly 4,000 bu. went to Canada.
Export sales for week ending June 18, million bu.
% of USDA commitments
Avg. for the week, %
% of USDA shipments
Avg. for the week, %
Sources: USDA, Reuters.
River, rail markets
High water disrupted barge movement and loadings on the Mississippi and Illinois rivers and briefly pushed up basis bids on the river for corn and soybeans that, in turn, raised bids in the rail markets, Midwest grain dealers said last week.
Bids later slipped back as water levels retreated and farmers responded to the higher basis and higher futures by selling old-crop corn and soybeans.
Overall, grain shipments remained strong on both the river and rail markets. On the Ohio River, corn basis bids rose 1-2 cents from the previous week.
Demand for corn in the Southeast poultry and ethanol markets improved rail basis bids by 1-2 cents over the past week. One central Iowa dealer reported sending trains of corn to California dairy farms.
Improved demand on the rail and river markets offset weakness by local processors, who dealers said have ample supplies of corn and soybeans due partly to the increase in farmer selling.
Rain — and lots of it — has been the main driver in the Chicago, Ill., grain markets, pushing soybean futures to a nearly four-month high, corn to a two-month high and wheat to a two-week high.
A series of random storms hit the Midwest in the past week, with one batch dumping up to 8 in. in one night in central Iowa and lesser amounts elsewhere in the state. Those followed on the heels of storms from a week earlier generated by the remnants of Tropical Storm Bill.
The rain fueled fund buying and short covering in the Chicago markets as what appeared to be healthy crops may now be less than healthy.
The rain has weakened corn and soybean plants and slowed the soft red winter wheat harvest. USDA lowered its corn and soybean condition ratings because of the wet weather, and traders expect additional reductions.
Late in the week, soybeans were trading above $10/bu. for the first time since early May, and corn was above $3.75/bu. for the first time since late April. Soft red winter wheat and hard red winter wheat traded above $5.30/bu., and spring wheat was above $5.70/bu.
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