The USDA took an aggressive approach to changing corn estimates in the June crop report with the market reacting bullish. Soybeans and wheat remained relatively the same as the last report with soybean reacting mildly bearish and wheat reacting bullish. The report’s narrative states, “Unprecedented planting delays observed through early June are expected to prevent some plantings and reduce yield prospects.”
Corn
- Corn yields were slashed by 10 bpa from 176 to 166. This came as a surprise as most analysts didn’t expect such an aggressive cut this early. The USDA has only revised corn yields in the June WASDE five other times in the last 25 years since 1993. For reference, the lowest trade estimate from Reuters was 169.
- Corn planted and harvested acreage were also decreased. For reference, the USDA has only changed acreage estimates 4 times in the June WASDE in the last 25 years.
- Corn 19/20 beginning stocks were increased by 100 million bushels, reflecting a 100 million bushel cut to 18/19 export estimates.
- Corn production for 19/20 is forecast to decline 1.4 billion bushels to 13.7 billion, which if realized would be the lowest since 2015/16.
- Planting delays have prompted the USDA to lower corn yield and planting prospects. Total corn usage was lowered as well, based on reductions to feed and residual usage and exports.
Soybeans
- Soybean numbers were bearish with yield and production unchanged but ending stocks increased. The increase was all due to a 75 million bushel increase in beginning stocks, stemming from a decrease in old crop exports by the same amount. Total usage for the 19/20 crop year was left untouched.
- Soybean yield and acreage has remained unaltered, however, likely because beans can be planted later than corn, so they aren’t as willing to make changes to production estimates.
Wheat
- Wheat was kept relatively the same. Ending stocks were revised lower based on marginal changes to beginning stocks and production.
- Feed and residual use was increased by 50 million bushels to 140 million bushels based on reduced projected corn supplies.
The USDA will release its Acreage report on June 28, which will provide survey-based indications of planted and harvested area.
Read the full report here.
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