Market Analysis

The USDA’s June acreage report provided some big surprise for US corn and soybeans plantings again this year. Despite expectations of substantial increase from their March intentions, corn seedings were up moderately while soybeans were down 45,000 acres from its spring level. Winter wheat’s 600,000 rise and sorghum’s 450,000 lower plantings vs, March were unexpected too. Overall, this quarter’s corn, soybean and wheat (WEAT) stocks levels had only modest differences from the trade’s expectations. The combination of lower US plantings and drought conditions remaining in the Northwestern Midwest rallied CBOT prices sharply after the report.

Interestingly, US farmers reported a 1.55 million acre rise in corn seeding to 92.7 million, but this amount was 1.1 million less than the trade average estimate. The ECB contributed 350,000 acres while the WCB plantings were up 650,000. MN, ND and SD seedings were up 1.2 million while IA, NE and MO were down 550,000 acres. The balance of higher corn plantings were spread across the US. This was 2nd year that the trade has overestimated corn plantings.

2021’s US soybean plantings increased sharply in their March intentions by 4.52 million, led by 3 million from the WCB and 900,000 in the ECB. However, the Midwest slipped 300,000 in this survey with the rest of the US up by 255,000 acres. Overall, the trade overestimated US bean seeding by 1.4 million acres, the 3rd year in a row for this trend.

US spring wheat plantings were down 160,000 acres from March and 670,00o from 2020 while durum seedings were off 60,000 and 204,00 from 2020. Winter wheat’s sharp jump lead by a 350,000 jump TX and 150,000 rise CO remains a bit head scratcher for so late in the season.

Overall, June’s 8 major US crops rose by 950,000 acres from March and 7.95 million from 2020’s seedings. The trade was expecting 3,65 million higher level of 255.5 million.

June’s quarterly US stocks followed the trade’s estimates. It appears that wheat and corn feeding were slightly better than expected. Bean stocks continued to follow their crush and export paces suggesting no 2020 crop size change at this time.

What’s Ahead:

After the release of the USDA’s Acreage report, the balance of the US growing season will be highly important to the 25 million corn (CORN) and 25 million soybean (SOYB) acres being impacted by the current drought in the northwest Midwest. Recent freezes in Brazil’s southern safrina corn areas adds to the world’s corn output uncertainty.

Hold your remaining old-crop and keep new-crop sales at 20-25% at this time.