Will the Corn Acreage Estimate Resuscitate Prices?
FJLive-June30-Flory-Nelson
The annual Acreage report in June tends to have a few surprises. This year’s edition definitely delivered.
Ahead of the June 30 report, analysts were predicting corn acres at 95.207 million, soybeans acres at 84.716 million and all wheat acres at 44.718 million.
USDA saw less acres in all categories. Here is an overview of the key acreage numbers:
- Corn: 92.0 million acres, which is up 3% from last year and down from the Prospective Plantings estimate of 96.9 million acres
- Soybeans: 83.8 million acres, which is up 10% from last year and up slightly from the Prospective Plantings estimate of 83.5 million acres
- All Wheat: 44.3 million acres, which is down 2% from last year and down from the Prospective Plantings estimate of 44.7 million acres.
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“Oftentimes the corn acreage number isn’t the biggest number in this round of reports,” says Rich Nelson, Allendale chief strategist. “But a 5-million-acre drop from March is the second largest drop since 1980 between the June and March reports.”
The soybean acre came in within trade expectations, adds Chip Flory, AgriTalk host and Farm Journal economist. The combined total of corn and soybean acres now sits at 175.8 million. That’s down from USDA’s March estimate of 180.5 million. Principle crop acres were at 319.1 million in March, but they now sit at 311.8 million acres.
“When we take that much off, I think it does give us a better opportunity for higher prices in the future,” Flory says. “This is a big decline in overall plantings.”
For Grain Stocks, the pre-report estimates were corn stocks of 4.951 billion bushels, soybean stocks of 1.392 billion bushels and wheat stocks of 0.980 billion bushels.
As of June 1, USDA estimates Grain Stocks at:
- Corn stocks totaled 5.22 billion bushels, up less than 1% from the same time last year. On-farm corn stocks were up 3% from a year ago, but off-farm stocks were down 2%.
- Soybeans stored totaled 1.39 billion bushels, down 22% from June 1, 2019. On-farm soybean stocks were down 13% from a year ago, while off-farm stocks were down 28%.
- All wheat stored totaled 1.04 billion bushels, down 3% from a year ago. On-farm all wheat stocks were up 12% from last year, while off-farm stocks were down 7%.
“The big corn acreage number offset the negative quarterly Grain Stocks report for corn,” Flory says.
Nelson agrees. “The corn acreage change implies 1 billion bushels is off the table for new crop production, and that overshadowed a disappointing Grain Stocks report.”
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