The USDA’s June 1 Grain Stocks and Acreage reports contained estimates that were generally as expected for soybeans, but both reports contained surprises for corn, according to University of Illinois Agricultural Economist Darrel Good. The estimates were friendly for old-crop price prospects, but negative for new-crop prices, at least in the short run.

“June 1 stocks of corn were estimated at 2.764 billion bushels, about 90 million bushels less than the average pre-report guess and the smallest June 1 inventory in 16 years,” Good says. “The stocks estimate implied feed and residual use of about 920 million bushels during the March-May quarter, about 60 million more than use during the same quarter last year. Feed and residual use during the first three quarters of the marketing year totaled 4.06 billion bushels. To reach the USDA projection of 4.4 billion bushels for the year, use during the summer quarter needs to be only 340 million bushels, nearly the same as use of last summer,” he says.

Good reports that while the number of cattle on feed on June 1, 2013, was 3% less than the inventory of a year ago, the June 1 hog inventory of market hogs was equal that of a year earlier, broiler numbers are equal to or slightly higher than those of a year ago, and it appears that dairy cow numbers are holding steady (USDA no longer reports numbers on a monthly basis). It appears that feed use this summer could exceed that of a year ago, because large quantities of new-crop corn will not be available before Sept. 1, as was the case last year, reducing year-end stocks to a pipeline level.

“The June survey revealed planted acres of corn of 97.379 million acres, 97,000 acres more than March planting intentions, slightly larger than planted acreage of a year ago, and about two million acres above the average pre-report guess,” Good says. “Compared to March intentions, acreage estimates were larger for Michigan, Missouri, Nebraska and Texas and unchanged or smaller for most other major corn-producing states. Acreage of corn to be harvested for grain was estimated at 89.135 million acres, 1.76 million more than harvested last year. The difference between planted acreage and acreage harvested for grain of 8.244 million acres is smaller than the difference of 9.78 million experienced after the drought of last year, but is about one million acres more than is typical following a favorable growing season. Harvested acreage of other feed grains (sorghum, barley, and oats) was estimated at 10.356 million acres, 1.112 million more than harvested last year,” he says.

 

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June 1 stocks of soybeans were estimated at 434.5 billion bushels, which Good says is very near the level that would be expected given the magnitude of March 1 stocks and estimates of use during the March-May quarter.

“June 1 stocks were at the smallest level in nine years and suggest that the pace of the domestic crush will have to slow substantially this summer and that year-ending stocks will be at a minimum pipeline level of about 125 million bushels,” he says.