PF Reaction: Trade Is Ignoring Slightly Bearish Corn & Bean Figures

June 29, 2012 03:39 AM
 

 

 

** ACREAGE REPORT **  

  • CORN: 96.405 mil. acres; trade expected 95.962 mil. acres
    -- compares to 95.864 mil. ac. in March; 91.921 mil. ac. in 2011
  • SOYBEANS: 76.080 mil. acres; traders expected 75.575 mil. acres
    -- compares to 73.902 mil. ac. in March; 74.976 mil. ac. in 2011
  • ALL WHEAT: 56.017 mil. acres; traders expected 56.851 mil. acres
    -- compares to 55.908 mil. ac. in March; 54.409 mil. ac. in 2011
  • SPRING WHEAT: 11.995 mil. acres; traders expected 12.656 mil. acres
    -- compares to 11.976 mil. ac. in March; 12.394 mil. ac. in 2011
  • DURUM WHEAT: 2.203 mil. acres; traders expected 2.299 mil. acres
    -- compares to 2.223 mil. ac. in March; 1.369 mil. ac. in 2011
  • COTTON: 12.635 mil. acres; traders expected 12.68 mil. acres
    -- compares to 13.155 mil. ac. in March; 14.732 mil. ac. in 2011



Planted corn acres are 443,000 acres above the average pre-report trade estimate and 541,000 acres above intentions in the March Prospective Plantings Report. That should be a touch negative for new-crop corn futures. In the June Supply & Demand Report, USDA's World Board projected harvested acres would reach 92.9% of planted acres. At that level, harvested acres would be 89.56 million. In today's Acreage Report, USDA estimates harvested acres at 88.851 million. That's a more-reasonable harvested acreage percentage of 92.2%, which is right in line with recent years.

Looking at the state-by-state changes in acres from March intentions, corn planted acres are up in Illinois (500,000), Indiana (100,000), Missouri (300,000), Ohio (100,000), South Dakota (500,000) and Wisconsin (150,000). Corn planted acres are down in Iowa (600,000) and Nebraska (400,000). Steady with March intentions are Kansas, Michigan, Minnesota, North Dakota and Texas. That means about 1 million acres were added in states currently suffering from severe drought, and 1 million acres were lost in states that still have trendline or slightly above-trend yield potential (Iowa and Nebraska). No acres were added in above-trendline yield potential states (Minnesota).

Planted soybean acres are 505,000 acres above the average pre-report trade estimate and 2.178 million above March intentions. That should be negative for new-crop soybean futures. Harvested soybean acres are now estimated at 75.315 million, up 1.679 million acres from last year. That is also 2.315 million more harvested acres than projected in the June S&D Report.

Looking at the state-by-state changes in acres from March intentions, soybean planted acres are up in Indiana (190,000), Iowa (430,000), Michigan (40,000), Minnesota (120,000), Missouri (100,000) and Nebraska (130,000). Bean acres are down from March intentions in Arkansas (30,000), Illinois (140,000), Kansas (150,000), North Dakota (250,000), Ohio (10,000) and South Dakota (230,000).

All wheat acres are 834,000 acres below the average pre-report trade estimate, but 109,000 acres above March intentions. That should be a positive for 2012-crop wheat futures today.
Spring wheat acres are 661,000 acres below pre-report trade expectations, but 19,000 above March intentions. That should be a positive for 2012-crop wheat futures today.

Looking at the state-by-state changes in acres from March intentions, spring wheat planted acres are up in Montana (200,000). Spring wheat planted acres are down in Colorado, Idaho, Oregon and Washington. Spring wheat acres are steady with March intentions in North Dakota, Minnesota and South Dakota.

Cotton acres are 45,000 below the average pre-report trade estimate and 520,000 below March intentions. That should be a positive for new-crop cotton futures today.

Looking at the state-by-state changes in acres from March intentions, all-cotton planted acres are steady in Texas and down 150,000 acres in Georgia.


** QUARTERLY GRAIN STOCKS **

  • CORN: 3.15 billion bu.; traders expected 3.182 billion bu.
    -- compares to 6.009 bil. bu. Mar. 1 and 3.670 bil. bu. June 1, 2011
  • SOYBEANS: 667 million bu; traders expected 640 million bu.
    -- compares to 1.372 bil. bu. Mar. 1 and 619 mil. bu. June 1, 2011
  • WHEAT: 743 million bu.; traders expected 726 million bu.
    -- compares to 1.201 bil. bu. Mar. 1 and 862 mil. bu. June 1, 2011


Corn stocks in all positions on June 1 were down 14% from year-ago. Of the total stocks, 1.48 billion bu. are stored on farms, down 12% from year-ago. Off-farm stocks of 1.67 billion bu. are down 16% from year-ago. Implied disappearance in the third quarter of the 2011-12 marketing year is 2.87 billion bu., up slightly from 2.85 billion bu. in the same quarter last year.

Soybean stocks in all positions on June 1 were up 8% from year-ago. On-farm stocks of 179 million bu. are down 18% from year-ago. Off-farm stocks of 488 million bu. are up 22% from year-ago. Implied disappearance in the third quarter of the 2011-12 marketing year is 707 million bu., up 12% from the same quarter last year.

Wheat stocks in all positions on June 1 were down 14% from year-ago. On-farm stocks of 112 million bu. were down 14% from last year. Off-farm stocks of 631 million bu. are down 14% from year-ago. Implied disappearance in the final quarter of the 2011-12 marketing year was 457 million bu., down 19% from the same quarter last year. That puts 2011-12 wheat carryover at 743 million bu., up 49 million bu. from the June S&D Report.


** MARKET REACTION **

Despite corn and soybean planted acres coming in above pre-report trade expectations, the weather forecast and a general "risk-on" attitude in today's market has corn futures up 15 to 20 cents, soybeans up 25 to 30 cents and Chicago wheat futures up 8 to 12 cents.


 

 

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