What to Watch for in the June WASDE Report
On Thursday, June 11, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates. What surprises could the data hold?
“I believe this report will have a bearish tone for the corn market,” says Joe Vaclavik, owner of Standard Grain. “USDA will likely continue to use its March corn acreage estimate of 97 million. They probably won’t adjust the corn yield. If they did, it would be to the upside in my opinion, given a quick planting pace and strong crop ratings.”
The grain markets have stayed soft ahead of the report, Vaclavik says.
“My hope for the corn market is that we are able to shrug off the bearish-looking report tomorrow and start to focus on weather and hope for some sort of upside. It will be a bearish report, but it shouldn’t be a shock to anyone.”
Stay Focused on Demand
John Payne, senior futures and options broker and market strategist with Daniels Trading, says his focus will be on any demand adjustments.
“We’ve obviously had a tough second quarter, both export-wise and from the standpoint of ethanol use,” says Payne, who is also the publisher of the grain-focused newsletter called “This Week in Grain.” “USDA hasn’t really talked to that, as far as demand in this marketing year, which runs until August.”
Payne doesn’t expect USDA to change the supply side of the equation. His worry is USDA lowers the old-crop demand, which raises old-crop stocks, which then raises new-crop stocks.
“That’s where you worry what a 3.4-billion-bushel carryover is going to do to the market,” he says. “Anytime we’ve seen a big supply market, you see farmers have to sell. When we sell for storage reasons is when we get cheap.”
Pre-Report Trade Estimates
Like most analysts, Dan Hueber, general manager of The Hueber Report, doesn’t expect changes in the production numbers for corn and soybeans. “But there will be other tweaks.”
Here are trade estimates:
Corn Production: 15.92 billion bushels, from a yield of 178.3 bu. per acre.
Corn Ending Stocks
- 2019/20: 2.16 billion bushels.
- 2020/21: 3.36 billion bushels.
Soybean Production: 4.138 billion bushels, from a yield of 49.9 bu. per acre.
Soybean Ending Stocks
- 2019/20: 577 million bushels.
- 2020/21: 427 million bushels.
Wheat Production: 1.853 billion bushels.
Wheat Ending Stocks
- 2019/20: 979 million bushels.
- 2020/21: 904 million bushels.
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