CBOT weekly outlook: USDA reports generate immediate turnaround

The USDA building in Washington, D.C. (Art Wager/iStock/Getty Images)

MarketsFarm — Commodity prices for corn, soybeans and wheat made a very quick turnaround on Wednesday following the release of two major reports from the U.S. Department of Agriculture (USDA).

“At 11 o’clock corn was down 14 cents per bushel and went limit up 40 cents,” commented Scott Capinegro of Barrington Commodities in Barrington, Ill.

USDA issued its reports on acres, along with data on grain stocks as of June 1. To Capinegro, the acreage report had the greatest impact on the Chicago Board of Trade (CBOT).

USDA pegged corn acres 92.7 million, up two per cent from what was planted a year ago, and soybeans came in at 87.6 million, up five per cent. Total wheat acres also rose five per cent at 46.7 million, the fourth smallest amount on record. Of that, winter wheat acres rose 11 per cent at 37.7 million, while spring wheat fell five per cent at 11.6 million and durum dropped 12 per cent at 1.48 million.

“The acres are pretty shocking. Everybody thought it was definitely going to be more,” Capinegro said, noting there could be trouble ahead.

“For beans, we don’t have enough acres. It’s going to be very tight, especially with the weather and crop conditions. Our western Corn Belt is going to hurt us big time.”

Should weather remain hot and dry, especially across the U.S. northern Plains, parts of the Midwest and other areas suffering from very dry conditions, then Capinegro suggested new contract highs will be set.

As for quarterly grain stocks, he said USDA wasn’t too bad with its latest numbers,

USDA reported corn stocks as of June 1 were down 18 per cent from a year ago at 4.11 billion bushels and soybeans fell 44 per cent at 767 million bushels. Wheat stocks also pullback 18 per cent at 844 million bushels with durum sliding 34 per cent at 27.5 million.

However, Capinegro did have a question about the data: “Does that mean our demand is out there still, or was last year’s crop still overstated?

“Now that acres are out of the way, we better get the yields up where they should be. Right now, I don’t think they are there.”

With western growing areas faced with such difficult crop conditions, Capinegro warned he has never seen a year in which the eastern Corn Belt produced enough to cover the shortfalls out of the west.

Table 1. U.S. planting estimates (millions of acres). Source: USDA National Agricultural Statistics Service.

Crop.                   . June 2020.   . March 2021.  . June 2021
Corn 90.8 91.1 92.7
Soybeans 83.1 87.6 87.6
All wheat 44.3 46.4 46.7
-Winter wheat 30.4 33.1 37.7
-Spring wheat 12.3 11.7 11.6
-Durum 1.7 1.5 1.5

Table 2. U.S. grain stocks (millions of bushels). Source: USDA National Agricultural Statistics Service.

Crop.          . June 2020.   . June 2021
Corn 5,224 4,110
Soybeans 1,386 767
Wheat 1,028 844
Durum 43 28

 

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