Agricultural News
USDA Acreage and Stocks Reports Spur Rally for Grain Markets
Tue, 30 Jun 2015 17:26:10 CDT
The latest acreage and grain stocks report provided plenty to move the futures market. On Tuesday, the U.S. Department of Agriculture released their latest estimates. Tom Leffler of Leffler Commodities said there was plenty of trading and wheat, corn and soybeans all finished with double digit gains when the markets closed. Radio Oklahoma Network's Leslie Smith interviewed Leffler Tuesday. Click or tap on the LISTENBAR below to hear the full report.
American farmers planted 1.7 million fewer acres of corn in 2015 than they did the previous year, according to the USDA's Acreage report. The report indicates a 300,000 acre net decrease from the prospective planting report released in March. Total corn planting in the United States total 88.9 million acres, for the lowest planted acreage since 2010. Notably, it still represents the sixth-largest U.S. corn acreage planted since 1944. Leffler said this was lower than trade expectations and the third straight year for a decline in corn acres. He said is was friendly to the market, but not overly friendly.
"Corn farmers produced an abundance in 2014 that resulted in a large carry over into this year," National Corn Growers Association President Chip Bowling said. "While planted acreage has decreased as farmers in many parts of the country face unrelentingly wet conditions, U.S. farmers have steadily increased our ability to grow more corn on every acre. Americans can rest assured that we will be able to meet all needs, be they for food, fuel or fiber, for years to come."
Given the projected harvested corn acreage released in the report of 81.9 million acres and the most recent USDA estimate average national yield of 166.8 bushels per acre, farmers could harvest 13.5 billion bushels.
The largest year-to-year acreage decreases were seen in South Dakota and Missouri, where corn acreage decreased by 600,000 and 300,000. Corn plantings also decreased in Indiana and Ohio by 200,000 acres.
U.S. soybean acres were estimated at 85.13 million acres. Leffler said that was lower than trade estimates, but are still a record soybean acreage estimate.
U.S. wheat acres were estimated at 56.1 million acres. That was down one percent from 2014 and Leffler said that had no bearing on the market.
U.S. cotton acres were estimated at 9 million acres. That's 18 percent lower than a year ago.
With the surveys taking place from late May into June, USDA is looking at revising the numbers in the next acreage report to be released on August 12th. Leffler said USDA will re-survey the cotton acres in Texas, the sorghum acres in Kansas and soybean acres in Arkansas, Kansas and Missouri.
On Tuesday, USDA also released the latest grain stocks report. Leffler said wheat stocks came in larger than trade expectations at 753 million bushels. That's 28 percent higher than a year ago. On farm storage of wheat was up 60 percent and off farm storage was 21 percent higher than a year ago.
Corn stocks came in at 4.47 billion bushels. Leffler said that's a 15 percent increase over a year ago. On farm storage was up 22 percent and off farm storage was up nine percent over 2014.
Soybean ending stocks came in at 625 million bushels. Leffler said that was 54 percent higher than a year ago with on farm storage up 126 percent and off farm storage up 28 percent over a year.
Overall, Leffler called the reports "friendly" for corn and soybeans, but not price bullish. In looking at the commodities, he said soybean prices had already gained $1.06 over the previous ten trading sessions with another 36 cent gain Tuesday. Over the last six sessions, the December futures contract gained 44 cents with an additional 23 cent gain Tuesday. While the September Kansas City wheat contract has gained 83 cents over the last seven sessions and finished 23 cents higher on the day.
"It seems like maybe a little bit too much upside on no more bullishness than we have in the marketplace," Leffler said. "I think you can thank a lot of today's extreme upside is buying by the funds and the managed money."
With the July 4th holiday, trading will be shortened on Thursday and the markets will be closed on Friday, so Leffler said it's hard to tell if the markets will hold onto these strong gains.
For the full Acreage report, click here.
For the full Grain Stocks report, click here.
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