The June 30 USDA Acreage and Grain Stocks reports are always highly anticipated, because they become the first “hard data” after the March USDA Prospective Plantings Report to give an indication of crop production levels in a given growing season, as of June 1. Many times the June USDA reports can have a big impact, either upward or downward, on grain market trends. There was much anticipation for June 30 report in 2011, given the uncertainty surrounding crop planting in some areas of the U.S., and the poor growing conditions in many areas.
Interestingly, the June 30 Acreage Report showed total 2011 planted corn acres in the U.S. at 92.3 million acres, which is the second-highest number of planted corn acres since 1944, trailing only the 93.5 million planted corn acres in 2007. The listed corn planted acres, as of June 1, was a slight increase compared to the Planting Intentions Report in March 2011, and was an increase of about 5%, compared to the 88.2 million planted acres of corn in the U.S. in 2010.
The report listed 2011 planted soybean acres at just below 75.2 million acres, which is about 1.4 million acres fewer than the March planting intentions for soybeans. By comparison, 77.4 million acres were planted to soybeans in 2010, which means that the June USDA estimate also represents about a 3% decrease in soybean acres in 2011. USDA projects total 2011 wheat acres at 56.4 million acres, which is an increase of 2.8 million acres from total 2010 wheat acres.
The June 30 USDA Grain Stocks Report listed total corn stocks at just below 3.7 billion bushels, compared to 4.3 billion bushels in June, 2010, with about 43% of that corn still stored in on-farm storage. Interestingly, the amount of available corn stocks were increased by 370 million bushels from just one month ago, which is rather large given the very tight corn supply that currently exists. Corn ending stocks for 2011-2012 are now estimated near 1.1 billion – an 8.6 % stocks-to-use ratio – which compares to estimated corn ending stocks of 695 million, or a stocks-to-use ratio of just 5.2% one month ago.
The U.S. soybean stocks in the June 30 report were listed at over 1.2 billion bushels, which is just slightly lower than the soybean stocks in June 2010. The 2011 wheat stocks in the June 30 report were listed at about 861 million bushels, which represents a 12% decrease in wheat stocks, compared to the 975 million bushels in June, 2010.
Corn prices reacted quickly to the bearish trends identified in the June 30 reports for corn, with Chicago Board of Trade (CBOT) futures prices on most contracts dropping the limit of 30¢/bu. on June 30, and the nearby July CBOT futures – which had no limit – dropping by over 80¢/bu. CBOT nearby corn futures prices opened at $6.29/bu. on July 1, which compares to $7.77/bu. on June 13. Local cash corn prices in southern Minnesota closed near $5.90/bu. on June 30, which was about $1.50 below the corn prices in mid-June. Local cash corn prices have generally been above $6.50/bu. since Feb. 1.
CBOT soybean prices also dropped following the June 30 reports. Nearby July soybean futures prices opened at $13.08/bu. on July 1, which compares to $13.85 on June 13. Local cash soybean prices in southern Minnesota on June 30 closed near $12.60-12.70, about 75¢/bu. below mid-June price levels.
USDA Numbers Questioned
Some grain marketing analysts and observers have questioned the numbers released by USDA in the June 30 Acreage Report. The biggest question is how USDA could justify the increase in actual planted corn acres in 2011, above the intended planted corn acres in March 2011, given the serious planting delays in many portions of primary growing area. As recently, as June 9, 2011, USDA estimated planted corn acres in the U.S. at 90.7 million acres, compared to 92.3 million acres in the June 30 report.
Planting delays in the Upper Midwest and the eastern Corn Belt, especially in Minnesota, Ohio and North and South Dakota, have been well documented. The USDA Farm Service Agency recently estimated prevented-planted crop acres at 6.4 million acres in North Dakota alone; however the June 30 report suggests that total corn acreage in North Dakota will increase by 250,000 planted acres in 2011. USDA also estimated that corn acres in 2011 will increase by 400,000 acres in Minnesota and 750,000 acres in South Dakota compared to 2010. USDA plans to do a follow-up crop planting survey in July in Minnesota, Montana and North and South Dakota, and will revise the planted acreage numbers in those states, if necessary.
Another big question mark in the June 30 report is the nearly 84.9 million acres to be harvested as grain, which is about 92% of the total planted corn acreage, and is about normal to account for corn used as silage and abandoned acres. Given the late planting in many areas, the severe flooding in the Missouri and Mississippi river basins and the drought conditions in the Southern Plains, many are questioning using a normal percentage of planted acres that will be harvested in 2011. It will be very interesting to see how this all unfolds as the 2011 growing season progresses, and what impact it has on corn prices.
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