USDA on June 28 will release the June 1 Grain Stocks and June Acreage reports, likely setting the tone for old and new crop corn and soybean prices and leaving the door open for potential surprises.
University of Illinois Economist Darrel Good said expectations vary on the reports because feed and the residual use of corn is not estimated on a continuing basis, and is rather revealed by the stocks estimate.
That stocks estimate in turn is based on available estimates of other uses during the quarter, as well as a calculation of feed and residual use.
"A surprise in the stocks estimate would be an indication that feed and residual use was occurring either more rapidly or more slowly than projected," Good said.
For the year, the USDA projects feed and residual use of corn at 4.4 billion bushels, 145 million less than used last year. The estimate of use during the first half of the year was 227 million less than use during the same period last year.
Good said that if the projection is correct, use during the last half of the year should be 82 million bushels larger than use of a year ago.
And, with the late-planted crop this year, new crop supplies will be much smaller. If that is the case, the USDA projection would imply feed and residual during the March-May quarter of about 840 million bushels, down about 20 million from use of a year ago, Good estimated.
Use at that level would result in total consumption for the quarter of 2.571 billion bushels and June 1 stocks of 2.858 billion bushels.
For soybeans, Good said that March 1 stocks were estimated at 999 million bushels and March-May imports were likely near 10 million bushels, resulting in total supplies of about 1.009 billion bushels.
"Expectations for planted- and harvested-acreage estimates will be based on the March report of planting intentions of 97.282 million acres for corn and 77.126 million acres for soybeans, and likely changes from intentions based on the very late planting season," Good said.
He noted that because the survey for the estimates was conducted in the first half of June, estimates may still reflect intentions in some cases. It is difficult to form acreage expectations, so a wide range of guesses is likely.
"Based on anecdotal reports, a few non-random private surveys, and historical evidence, we would expect planted acreage of corn to be 2.5 to 3 million less than March intentions and soybean acreage to be as much as one million acres more than intentions," Good added.
Good noted also that the price reaction to the USDA reports will depend on the differences between expected and actual estimates, and the estimates for corn hold the most potential for surprises.