PF Reaction: Some Shockers in Today’s Acreage Report

Posted on Tue, 06/30/2020 - 11:40

Market reaction

Ahead of USDA's reports, corn futures were trading steady to a penny lower in most contracts, soybeans were 3 to 5 cents higher, wheat futures were narrowly mixed and cotton futures were steady to 10 points lower.

In reaction to the bullish acreage data, corn futures have shot 12 to 16 cents higher and soybeans have pushed 18 to 22 cents higher. Winter wheat futures have moved solidly higher, with futures are up 4 to 8 cents, and spring wheat futures are enjoying gains of 7 to 12 cents. Cotton futures are 70 to 116 points higher.

 

Acreage Report

Corn: 92.006 mil. acres; trade expected 95.207 mil. acres
— compares with 96.990 mil. acres in March; 89.7 mil. acres in 2019
Soybeans: 83.825 mil. acres; traders expected 84.716 mil. acres
— compares with 83.510 mil. acres in March; 76.1 mil. acres in 2019
All wheat: 44.250 mil. acres; traders expected 44.718 mil. acres
— compares with 45.158 mil. acres in March; 44.655 mil. acres in 2019
Spring wheat: 12.200 mil. acres; traders expected 12.551 mil. acres
— compares with 12.590 mil. acres in March; 12.66 mil. acres in 2019
Durum wheat: 1.500 mil. acres; traders expected 1.313 mil. acres
— compares with 1.290 mil. acres in March; 1.339 mil. acres in 2019
Cotton: 12.185 mil. acres; traders expected 13.20 mil. acres
— compares with 13.70 mil. acres in March; 13.74 mil. acres in 2019

Wow! USDA’s June Acreage Report is full of surprises. USDA now estimates total acres planted to the 19 principal crops at just 311.9 million acres, down 7.2 million acres from March intentions. While principal crop acres are up 9.3 million acres from last year, they are estimated to be down 8.8 million acres from the 2011-2018 average.

USDA estimates corn planted acres at 92.0 million acres, down 5 million acres from March intentions and 3.2 million acres less than the average pre-report trade estimate. USDA’s estimate signals corn plantings only increased 2.3 million acres from last year. USDA estimates harvested corn acres at 84.023 million acres, 91.3% of planted acres.

Compared with March intentions, USDA lowered corn plantings in Illinois (down 400,000 to 10.9 million acres), Indiana (down 400,000 to 5.4 million acres), Iowa (down 100,000 to 14.0 million acres), Kansas (down 200,000 to 6.1 million acres), Michigan (down 200,000 to 2.3 million acres), Minnesota (down 300,000 to 8.1 million acres), Missouri (down 100,000 to 3.5 million acres), Nebraska (down 700,000 to 9.8 million acres), North Dakota (down 800,000 to 2.4 million acres), Ohio (down 100,000 to 3.6 million acres) and South Dakota (down 600,000 to 5.4 million acres). Of the 12 primary corn producing states, only Wisconsin (up 100,000 to 4 million acres) increased plantings versus March intentions.

USDA estimates soybean planted acres at 83.8 million acres, up 315,000 acres from March intentions but around 900,000 acres below the average pre-report trade estimate. USDA’s estimate signals soybean acres increased 7.7 million acres from last year.  USDA estimates harvested soybean acres at 83.020 million acres, 99.0% of planted acres.

Compared with March intentions, USDA raised soybean plantings in Arkansas (up 50,000 to 2.95 million acres), Indiana (up 300,000 to 5.7 million acres), Iowa (up 100,000 to 9.4 million acres), Kansas (up 300,000 to 5.3 million acres), Michigan (up 100,000 to 2.3 million acres) and Wisconsin (up 100,000 to 2.05 million acres). Soybean acres were unchanged from March intentions in Minnesota (7.4 million acres) and Ohio (4.8 million acres). USDA lowered its planted soybean acreage versus March intentions in Illinois (down 100,000 to 10.4 million acres), Missouri (down 200,000 to 5.6 million acres), Nebraska (down 100,000 to 5.0 million acres), North Dakota (down 600,000 to 6.0 million acres) and South Dakota (down 200,000 to 5.2 million acres).

USDA estimates other spring wheat acreage at 12.200 million acres, down 390,000 acres from March intentions and 351,000 acres below the average pre-report trade estimate. USDA estimates farmers in top producing North Dakota planted 6 million acres to spring wheat, down 100,000 acres from March intentions. Farmers in Montana planted 3 million acres to other spring wheat, down 300,000 acres from March intentions.

USDA estimates durum planted acres at 1.5 million acres, up 210,000 acres from March intentions and 187,000 acres higher than traders anticipated.

USDA estimates cotton plantings at 12.185 million acres, down 1.518 million acres from March intentions and roughly 1 million acres less than traders expected.

 

Quarterly Grain Stocks Report

Corn: 5.224 billion bu.; traders expected 4.951 billion bu.
— compares with 7.953 billion bu. March 1 and 5.202 billion bu. June 1, 2019
Soybeans: 1.386 billion bu.; traders expected 1.392 billion bu.
— compares with 2.253 billion bu. March 1 and 1.783 billion bu. June 1, 2019
Wheat: 1.044 billion bu.; traders expected 980 million bu.
— compares with 1.412 billion bu. March 1 and 1.080 billion bu. June 1, 2019

Corn stocks in all positions as of June 1 were up 22 million bu. from last year and were 273 million bu. above the average pre-report trade estimate. Of the total, 3.025 billion bu. were stored on-farm, up 2.6% from last year. Off-farm stocks of corn stood at 2.199 billion bu., down 2.4% from year-ago. Implied disappearance in the third quarter of the 2019-20 marketing year was 2.728 billion bu., down 20.5% from the same quarter last year.

Soybean stocks in all positions were down 397 million bu. (22%) from year-ago and came in 6 million bu. below the average pre-report trade estimate. Of the total, 633 million bu. were stored on-farm, down 13.2% from last year. Off-farm stocks of soybeans at 753 million bu. were down 28.5% from last year. Implied disappearance in the third quarter of the 2019-20 marketing year was 869 million bu., down 8% from the same quarter last year.

Wheat stocks in all positions on June 1 were down 36 million bu. (3%) from last year, but were 64 million bu. above the average pre-report trade estimate. On-farm wheat stocks totaled 232 million bu., up 12.3% from year-ago. Off-farm wheat stocks totaled 811.8 million bu., down 7% from year-ago. Implied disappearance of wheat in the final quarter of the 2019-20 marketing year was 372 million bu., down 28% from the same quarter last year.

Durum wheat stocks totaled 42.8 million bu., down 22% from last year. Grain sorghum stocks on June 1 totaled 72.5 million bu., down 38% from last year.