USDA Acreage and Quarterly Stocks bullish for row crops
The reported June USDA acreage and quarterly stock reports proved to be hopeful for row crops, but mixed for wheat.
The June USDA Acreage and Quarterly Stocks Reports were bullish for corn and soybeans and were mixed for wheat. Corn planted acreage was at 92.7 million acres (ma) for 2021 which is up 2%, or 1.87 million acres from last year. However, it was considered bullish, as it was nearly 1 million below the trade estimate of 93.8 ma. Compared with last year, planted acreage is expected to be up or unchanged in 28 of the 48 estimating states. Area harvested for grain, at 84.5 ma, is also up 2% from last year. At 177 bushels-per-acre expected, that would peg production at 14.956 billion bushels (bb).
Corn stocks on June 1, 2021, totaled 4.11 (bb), down 18% from June 1, 2020. This is one of the lowest levels in at least seven years. Of the total stocks, 1.74 bb are stored on farms, down 39% from a year earlier. Off-farm stocks, at 2.37 bb, are up 11% from a year ago.
Bryan Doherty with Total Farm Marketing of West Bend, Wisconsin, says this really changes the outlook for the corn market.
“If you take roughly 1 million acres off of the corn acreage expectation and use a 175 bushel per acre (bpa) yield average for the U.S., that is a tighter balance sheet by 175 mb. So, you could be looking at ending stocks at around the 1.1-billion-bushel mark, which is bullish,” he says.
The soybean acreage number was also bullish, with soybean planted area for 2021 estimated at 87.6 ma. While this is up 5% from last year, this figure was unchanged from the March intentions and nearly 1.4 ma below the average trade guess. Using an estimated yield of 50 bushels per acre, that puts estimated production for the 2021-22 crop at 4.335 bb.
Quarterly stocks for soybeans were also below expectations at 767 mb and down 44% from June 1, 2020. On-farm stocks totaled 220 million bushels, down 65% from a year ago. Off-farm stocks, at 547 mb, are down 27% from 2020.
Doherty says soybeans had an even tighter balance sheet than corn coming into the reports and this season, so there is even less room for error with new crop production. While there is still time to get an average yield on soybeans with August rains, prices need to be higher to ration demand.
“End users are going to have to become more aggressive in lining up their needs, and so this just points out the recent pull back in soybean prices was just a correction in an overall bull market,” Doherty said.
All wheat planted area for 2021 is estimated at 46.7 million acres, up 5% from 2020 and above trade estimates. However, this represents the fourth-lowest all wheat planted area since records began in 1919. The 2021 winter wheat planted area, at 33.7 ma, is up 11% from last year and up 2% from the previous estimate.
Of this total, about 23.6 ma are Hard Red Winter, 6.59 ma are Soft Red Winter, and 3.50 ma are White Winter. Other spring wheat acres are estimated at 11.6 million, down 5% from 2020, but this figure was again above trade guesses. Of this total, about 10.8 million acres are Hard Red Spring wheat. Durum planted area for 2021 is expected to total 1.48 million acres, down 12% from the previous year.
Old crop wheat stocks were more friendly at 844 mb, are down 18% from this time in 2020 and the lowest in six years. On-farm stocks are estimated at 142 mb, down 38% from last year. Off-farm stocks, at 702 mb, are also down 12%.