The 2019 June Grain Stocks and Acreage reports from USDA’s National Agricultural Statistics Service (NASS) were certainly an eye opener.
With most in the trade looking for another sharp fall in corn acres from the March intentions, the survey revealed a planted acreage number of 91.7 million acres (ma) — 4.3 ma above the average estimate, and up 3% versus last year. In soybeans, while the pre-report estimate called for little change from March intentions of 84.6 ma, the number came out at a shocking 80 ma — 10% below last year, with all 29 states surveyed having lower planting than in 2018.
Corn planting is certainly where the market focus was, following an unprecedented spring planting season that saw heavy rains and flooding. Most analysts and traders assumed a huge amount of acres would be enrolled in the prevented planting option rather than planted past the insurance dates. At the time of the survey, roughly 83% of the intended acreage was already planted. That would have left approximately 15.6 ma unplanted at the time of the survey.
NASS said that 91.7 ma of corn would be planted, which was well above the pre-report average estimate of 87 ma and just slightly below the lofty 92.8 ma assumed in the March intentions. This would result in a nearly 2.5-billion-bushel (bb) ending stocks number.
Out of the 48 states surveyed in the report, 40 came out with higher acreage than a year ago. The harvested acreage was forecast at 83.6 ma; with the latest 166 bushel-per-acre (bpa) yield from the May report, it would imply a final crop of 13.88 bb.
Individual states showed some surprises with Illinois, Indiana, Ohio, Michigan almost unchanged from a year ago. Higher planting in Indiana offset Ohio, and Missouri was down just 100,000 acres, with Illinois unchanged at 11 ma. Iowa, Nebraska, Kansas and North Dakota were all up from 400,000 to 550,000 acres, while South Dakota fell 500,000 acres.
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NASS unveiled plans to resurvey in July, and those results will be published in the Aug. 12 Crop Production report.
As far as the June 1 Grain Stocks report goes, corn was reported at a less-than-expected 5.20 bb. That compares to an average estimate of 5.306 bb, down 2% versus last year. On-farm stocks, at 2.95 bb, were up 7% from last year, with off-farm stocks down 12% at 2.25 bb. The March-to-May 2019 disappearance totaled 3.41 bb compared to 3.59 bb last year. Any benefit from the lower stocks number was negated by the focus on planted acreage.
December corn futures plummeted 19 1/2 cents per bushel, closing Friday, June 28, at $4.31 1/2, below the prior support level at $4.50
As in corn, the soybean acreage survey revealed a shock, but in the opposite direction. With analysts and traders expecting soybean acreage to be little changed in the first two weeks of June, the survey instead revealed a sharp drop in soybean acres to just 80 million planted, down a hefty 10% from last year and about 4.5 ma lower than the estimates. Most amazing is that all 29 states surveyed had a lower planted acreage than last year.
With soy planting expected to progress well into June, this survey surprised most. As is the case with corn, NASS will resurvey in July, and those results will be published on Aug. 12.
Some individual state planting numbers were big: Iowa, Minnesota and Nebraska had anywhere from 700,000 to 900,000 fewer acres, while South Dakota declined by 1.250 ma. Key Eastern Corn Belt states were down from 500,000 to 650,000 acres, with Ohio also down 300,000 acres.
Soybean stocks were revealed at 1.79 billion bushels, which was less than expected but still a record. The trade was expecting 1.856 bb, but 1.79 bb is still 47% above a year ago. Farmers and elevators are likely holding on to soybeans, awaiting a possible solution to the China trade impasse. On-farm stocks of 730 mb are up 94% from a year ago, and even off-farm stocks, at 1.06 bb, are up 26% versus last year.
Stocks were higher than expected as disappearance in the March-to-May 2019 quarter totaled 937 mb, up 5% versus a year ago.
November soybeans finished report day up just 10 3/4 cents higher, at $9.23.
All wheat acreage was pegged at 45.6 million acres, close to what was anticipated, but down 5% from a year ago, and the lowest since records began in 1919.
The 2019 winter wheat area of 31.8 ma is down 2% versus last year. Wheat planted in Kansas fell 600,000 acres versus a year ago, while Oklahoma and Texas were unchanged. There were notable losses in both North Dakota and Montana.
Spring wheat acreage came in at 12.4 ma, down 6% versus last year. Durum acreage, at 1.4 ma, is down 32% versus last year. South Dakota, Montana and Minnesota had the largest drops in spring wheat versus a year ago.
Old-crop wheat stocks came in at 1.070 bb, down 2% from a year ago and slightly less than the average trade estimate of 1.1 bb. Of those stocks, on-farm stocks were at 207 mb, up 58% from a year ago, while off-farm stocks were down 11%, 865 mb. The March-to-May 2019 disappearance of 521 mb is up 31% from a year ago.
Kansas City September wheat finished 20 cents per bushel lower, at $4.61 1/2, despite the June report citing the lowest all-wheat plantings on record.
While the June 28, 2019, Grain Stocks and Acreage reports were a total shock to the market in corn and soybeans, it is not clear that this report puts a damper on future market price appreciation on corn. NASS has announced plans to resurvey acres on corn, cotton, sorghum and soybeans in July. As stated earlier in this column, the results of that report will not be released until Aug. 12.
Although we could see major changes to final corn and soybean planted and harvested acres and yield, the trade will go off information provided from these June reports until then. As far as the markets are concerned, the major focus will now likely shift to growing weather, yield impacts and news from the U.S.-China trade talks.
Dana Mantini can be reached at firstname.lastname@example.org
Follow him on Twitter @mantini_r