US: Grain Stocks

Highlights

SOYBEANS:
US farmers planted 85.4 million acres of soybeans according to the June Acreage report. The average pre-report estimate was 85.2 million acres, with a range of 84-86.2 million. The March Planting Intentions report had acreage at 84.7 million acres. Soybean stocks as of June 1 were 1.061 billion bushels, versus expectations of 1.050 billion bushels and a range of 1.005 to 1.134 billion. June 1 stocks last year were 1.008 billion. On-farm stocks were 367 million bushels, down from 411.7 million last June. Off-farm stocks were 694 million, up from 595.94 million last year.

PRICE OUTLOOK: Today's report pegged US planted acres slightly above the average guess but generally in line with expectations, while stocks came in slightly higher-than-expected. Initial market reaction has been positive, partly due to an 11% decline in on-farm bean stocks from a year ago, likely because domestic usage is very strong and crush profit margins are high. This report eases concerns that bean acreage could be significantly higher, but the potential for strong yields due to favorable crop weather is likely to limit near-term rallies without new China demand


CORN:
US farmers planted 95.343 million acres of corn according to the June Acreage report. This is above the average pre-report estimate of 95.1 million acres but within the 94-97 million acres range. March Intentions report had planted acreage at 95.338 million acres. Corn stocks as of June 1 were 5.295 billion bushels, at the low end of the pre-report estimate range of 5.3-5.5 billion. The average expectation was 5.414 billion bushels. June 1 stocks last year were 4.643 billion. On-Farm stocks were 2.959 billion bushels, up from 2.566 billion last June. Off-Farm stocks were 2.336 billion, up from 2.087 billion last year.

PRICE OUTLOOK: Today's report highlighted that the extended planting season and high prices this spring did not prompt farmers to reduce corn acres, as they remained unchanged from the March report. USDA did note that not all acres had been planted at the time of their survey, but the difference is unlikely to be significant. Stocks were the bullish item in the report and came in slightly below the lowest guess, but on-farm and off-farm stocks increased from a year ago. The market had an initial friendly reaction, but favorable growing weather has limited speculative buying post-report, and prices are only a couple of cents higher, which is a bit of a disappointment given the bullish stock numbers.


WHEAT:
US All Wheat acreage is 42.72 million acres according to the June Acreage report. This is below the range of estimates. The average pre-report estimate was 43.8 million acres, with a range of 43.4-44.2 million acres. March Planting Intentions report had acreage at 43.8 million acres. Spring wheat acreage is 9.39 million versus 9.5 million expected and 9.415 million in March Intentions. Durum wheat acreage is 1.83 million versus 2 million expected and 1.95 million in the March Intentions. Wheat stocks as of June 1 were 920.112 million bushels, versus expectations of 931 million bushels and a range of 865-955 million. June 1 stocks last year were 854.734 million. On-Farm stocks were 177.094 million bushels, down from 183.985 million last June. Off-farm stocks were 743.018 million, up from 670.749 million last year.

PRICE OUTLOOK: USDA reported bullish numbers in today's report, with wheat stocks just over 10 million bushels lower than the guesses, but it was acreage that got the market's attention. As is often the case with short crops, acreage continued to drop from the March report and came in well below even the lowest guess on all wheat, winter wheat, and durum. Wheat has fallen significantly recently, and prices are bouncing post-report, which could continue as wheat does not have the overriding bearish weather fundamentals affecting corn and beans. With lower acreage, the July supply and demand report is likely to show another decline in ending stocks. This should be supportive for wheat in the near term.

Definition

This full-text report, issued four times yearly, contains stocks of all wheat, durum wheat, corn, sorghum, oats, barley, soybeans, flaxseed, canola, rapeseed, rye, sunflower, safflower, mustard seed, by States and U.S. and by position (on-farm or off-farm storage); includes number and capacity of off-farm storage facilities and capacity of on-farm storage facilities. The data is obtained via an off and on-farm stocks survey, the on-farm survey is a probability survey of farm operators, the off-farm stocks survey is enumerates the volume of grain in all known commercial grain storage facilities.

Description

Unlike the WASDE and other USDA reports, this report measures actual (counted) supply, not estimates or forecasts. It helps verify or correct the estimates in other the USDA reports, such as WASDE.

September is the most closely watched of the four quarterly reports, as it measures stock levels at the end of the marketing year for corn and soybeans. This number should equal the ending stocks number in the monthly Supply/Demand (WASDE) reports. If the September Grain Stocks number is different from the recent WASDE report, the next WASDE report will show an adjustment in supply and demand data to bring the numbers in line with each other. For example, if the WASDE reports have been calling for corn ending stocks to come in at 2.000 billion bushels and the September Grain Stocks report shows September 1 corn stocks at 1.892 billion, it would mean that actual supplies are smaller than projected. This would be a bullish surprise for the market, and we would expect the upcoming October WASDE report to reflect the new estimate.

The January, March and June stocks can also inform the rate of demand as the marketing year progresses.

The marketing year for wheat ends on May 31, and as such, the June Grain Stocks report is the most important for the wheat market.

Recommended for you

Upcoming Events