Friday USDA issued the June acreage and stocks reports and traders were anxious to see the quarterly stocks given some recent reports that made little sense to many. Analyst Tom Fritz of EFG Group in Chicago said Friday’s report did make some sense.
“The trade was looking for a quarterly stocks of 3.182 billion bushels,” he told HAT. “Well the government gives them 3.148 billion bushels, a little bit less than expected but everybody says ok, that’s a great number. It’s in line with what we think it should be.”
Planted acres were pegged at 96.4 million, larger than what the trade expected.
“That created the initial downturn off the report when December corn traded down to $6.22, but within moments later it traded back up to $6.55. What was that about? Well that was about the harvested acres. Basically the USDA showed that we had an increase of roughly 450 to 500 thousand acres planted, but they’ve lowered harvested acres. They lowered that by 250,000 and that’s from their previous number. So you couple that with the stressful weather that’s going on right now, and that’s what allowed the market to come screaming back.”
Then the market retraced the rally, but in choppy trade old crop corn futures did end the day over 20 cents higher.
USDA’s soybean stocks number at 667 million bushels was higher than expected and the acreage was estimated at 76.1 million, also higher than expected. Yield estimates are now on everybody’s mind, and because of severe crop stress this year Fritz would like USDA to make a yield adjustment on July 11th.
“When they first came out with a yield projection of 166, I’m like who are you kidding? And that’s even when conditions were still good, but to come out with a yield like that over and above trend line yield, it’s like what are you guys doing? So come July if they do indeed fool with the yield ideas, will it be 156 or 154? That’s a wildcard there and I do feel they should fool with the yield a little bit.”
USDA’s number for Indiana Friday showed an increase in corn, soybean and wheat stocks. Get those numbers here: