Today’s round of USDA reports offer little reprieve for falling corn prices.
In many ways, the June 11 round of Crop Production and World Agricultural Supply and Demand Estimates reports could be labeled as "ho-hum."
USDA left the 2014’s corn crop production at 13.935 billion bushels and the average yield at 165.3 bu./acre. For soybeans, total production is pegged at 3.635 billion bushels, with an average yield of 45.2 bu./acre.
Jerry Gulke, president of The Gulke Group, says many were guessing USDA may increase the average corn yield. In the report, USDA noted that U.S. crop conditions in the most recent Crop Progress report are the best in four years for the aggregated 18 reported states and better than any time since 2007 for the Corn Belt.
"If we are ever going to get a record yield, this would be the year," Gulke says. "A lot of people thought USDA would give an indication that they agree with us. But, they didn’t do that."
Listen to Gulke's full audio analysis:
Gulke says USDA is in the middle of its June crop survey. They are visiting and calling farmers to gauge if farmers planted their intended acres. With that information, more stocks information and a few more weeks of weather, Gulke says, USDA will likely amend yield and acreage estimates in the June 30 Acreage report and July 11 Crop Production and World Agricultural Supply and Demand Estimates reports.
Following the reports’ release, corn futures for December delivery dropped 0.8% to $4.415 a bushel on the CBOT, after touching $4.40, the lowest since February. "You would have thought the report would have held corn steady, since they didn’t increase yields," Gulke says. "But, it went down."
Today’s and Friday’s close will be important, he says. "We will see if the downward pressure continues."
For soybeans, Gulke says, the general consensus is we got more beans than last year. But, how many more?
As of Monday, 87% of this year’s soybean crop is in the ground, which is 6 percentage points above the five-year average. Emergence is also ahead of schedule, with 71% emerged. In the first round of condition ratings, the soybean crop is also in good shape, with 62% rated good and 12% rated excellent.
"Last Monday, we still had 10 million acres of beans unplanted," he says. "Nearly half of those were in areas that were wet. There’s a chance you end up with beans being in the prevent plant category."
He says that if that’s the case, a high average national yield will be needed to match supply and demand.
"There are still a lot of questions out there to be answered," Gulke says. "The market is always smarter than any one person."
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