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Corn+Soybean Digest

June 30 USDA Report

The June 30 USDA Acreage and Grain Stocks Reports are always highly anticipated, because it becomes 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 2010, given the uncertainty surrounding crop planting in some areas of the U.S., and the poor quality of some of the 2009 grain, especially corn that is still in storage.

Interestingly, the June 30 Acreage Report showed total 2010 planted corn acres in the U.S. at just below 87.9 million acres, which is almost 1.5 million acres below the average estimates of the grain traders, and nearly 1 million acres below the March planting intentions. The 2009 planted corn acres were listed at 86.5 million acres, so the 2010 corn acreage still represents an increase of about two percent, compared to 2009.

The USDA Report listed 2010 planted soybean acres at just below 78.9 million acres, which is slightly higher than the pre-report average estimates of 78.3 million acres by grain traders, and is about 700,000 acres above the March planting intentions for soybeans. By comparison, 77.5 million acres were planted to soybeans in 2009, which means that the June 1 USDA estimate also represents about a 2% increase in soybean acres in 2010.

USDA projects total 2010 wheat acres at 54.3 million acres, which is a decrease of 4.8 million acres from total 2009 wheat acres, and a decrease of about 8 million wheat acres in the U.S. compared to 2008. Sometimes farm operators in the heart of the Midwest wonder where all these extra corn and soybean acres are coming from in the USDA reports in the past couple of years. Obviously, the reduced wheat acres in the past two years are a big factor in the increased corn and soybean acreage.

The June 30 Grain Stocks Report listed total corn stocks at 4.3 billion bushels, which was slightly lower than trade expectations, and compared to 4.2 billion bushels in June 2009. Some analysts feel that the adjustment in the U.S. grain stocks as of June 1 may represent the lower test weight and poor grain quality of some of the 2009 corn that is still in storage. Some livestock producers have reported lower feed efficiencies when using the 2009 corn, which could be accounting for some increased corn usage.

The U.S. soybean stocks in the June 30 report were listed at 571 million bushels, which is slightly lower than trade expectations and is also lower than the 596 million bushels of soybean stocks in June 2009. The 2009 wheat stocks in the report were listed at 973 million bushels, which represents a 47% increase in wheat stocks, compared to the 657 million bushels in June 2009.

Corn prices reacted quickly to the bullish trends identified in the June 30 reports for corn, with Chicago Board of Trade (CBOT) futures prices rising 29¢/bu. on June 30. CBOT nearby corn futures prices closed at $3.54/bu. on June 30, which is actually the same closing price as on June 1. Local cash corn prices in southern Minnesota on June 30 closed near $3.20/bu., which was the highest price since early June. Local cash corn prices have generally been below $3.50 since March 1. It will be interesting to see if the bullish nature of the June 30 reports have any lasting effect on the 2010 corn market.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at [email protected]

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