USDA Issues Easter Basket of Reports- Lower than Expected Corn, Soy Acres; Hog Inventory Up 3%Thu, 29 Mar 2018 15:57:36 CDT
Corn and soybean prices shot up like a rocket late Thursday morning, after USDA’s hotly anticipated Prospective Plantings report predicted far fewer acres will be planted this year than industry analysts had estimated. Corn and soybean futures finished Thursday’s session with double digit gains, with winter wheat prices taking more modest gains and spring wheat futures down moderately.
Spring rains will continue across much of the eastern half of the country, per the latest seven-day cumulative precipitation forecasts from NOAA. Most areas east of the Mississippi River will see another 1” to 2” of accumulation through April 5.
Recent rains haven’t made an appreciable dent in drought-stricken areas – yet. The latest U.S. Drought Monitor, out Thursday morning, showed drought’s current footprint covering 49.2% of the U.S., down slightly from 49.9% a week ago. This marks the eighth consecutive week drought’s footprint has diminished, although high-intensity drought conditions persist across much of the Southern Plains and desert Southwest.
Jobless claims have hit a 45-year low and stocks bounced back from a selloff on Wednesday, with the Dow picking up 305 points in early afternoon trading to 24,165. Energy prices picked up modest gains, with crude oil trading back over $65 per barrel.
Grain markets are closed Friday, March 30, in observance of Good Friday. The Farm Futures Afternoon Market Recap will resume Monday, April 2.
Click here to view USDA's complete Prospective Plantings Report.
Corn prices surged nearly 4% after UDSA predicted substantially fewer acres than expected in its Prospective Plantings report. May futures gained 14.25 cents to $3.8775, and July futures rose 13.5 cents to $3.9575.
For corn, USDA estimates U.S. acres will total 88.026 million acres. That’s nearly 1.5 million acres below the average trade guess of 89.48 million acres, including a projection of 90 million acres by Farm Futures based on an exclusive farmer survey.
USDA also released its latest grain stocks data Thursday morning. Corn stocks in all positions rose 3% year-over-year, to 8.89 billion bushels. That includes a 2% increase in on-farm stocks (5.0 billion bushels) and a 5% increase in off-farm stocks (3.89 billion bushels). The average trade estimate for corn stocks was slightly lower, at 8.713 billion bushels.
These reports overshadowed USDA’s latest export sales report, which is released each Thursday. The latest report, covering the week ending March 22, saw 53.3 million bushels in old crop corn sales and 11.3 million bushels in new crop sales for a total of 64.6 million bushels. Trade estimates of 65.0 million bushels nearly hit the bullseye, and the weekly rate needed to meet USDA forecasts dropped to 17.2 million bushels. Mexico was the No. 1 destination for U.S. corn export shipments last week.
Corn spot basis bids were steady at Wednesday, slipping 1 to 5 cents at multiple Midwestern locations. An Illinois river terminal bucked the trend, raising prices 8 cents.
European Union corn imports have increased 50% year-over-year, totaling 503.9 million bushels by March 27 for the 2017/18 marketing year.
Preliminary volume estimates jumped to 502,914 contracts, up substantially from Wednesday’s final count of 284,775.
Soybean prices surged more than 2.5% Thursday as USDA’s 2018 acreage estimates came in lower than expected. May and July futures each gained 26.75 cents to $10.4475 and $10.5550, respectively.
USDA anticipates significantly fewer soybean acres than trade analysts predicted, with 88.982 million acres, which fell entirely beneath the trade estimate range of 89.9 million to 92.10 million acres. Farm Futures predicts U.S. farmers will plant 91.5 million acres, based on its farmer survey.
Still, if USDA’s estimated acres come to pass, U.S. farmers will have planted more soybeans than corn for the first time in 35 years.
The agency’s latest estimates for soybean stocks came in 21% higher year-over-year, to 2.11 billion bushels, with on-farm stocks up 28% and off-farm stocks up 17% from last March. The average trade guess, in contrast, was 2.030 billion bushels.
USDA’s latest export data for soybeans 11.7 million bushels in old crop sales and another 2.6 million bushels in new crop sales for a total of 14.2 million bushels last week. That amount was less than half of the prior week’s total of 33.0 million bushels, not to mention an average trade guess of 31.2 million bushels. China was the top destination for export shipments last week but only accounted for 5.1 million bushels.
Soybean crushing profit margins have processors hungry for more volume, with multiple Midwestern processors raising soybean spot basis bids by 2 to 3 cents. Prices were mixed at river terminals, meantime, down as much as 8 cents in one Iowa location but up 3 cents at an Illinois location.
Private exporters reported the sale of nearly 9.8 million bushels of soybeans for delivery to unknown destinations during the 2017/18 marketing year, which began September 1.
As of March 27, EU soybean imports were down 6% year-over-year, reaching 341.7 million bushels. Soymeal imports are up 6% and palm oil imports are up 3% over the same time frame.
Preliminary volume estimates reached 346,175 contracts, nearly double Wednesday’s final count of 183,108.
Wheat prices were mixed in Thursday’s session. Winter wheat found spillover strength from surging corn and soybean prices, but spring wheat futures fell after USDA estimates for 2018 acres came in higher than expected. May Chicago SRW prices added 5.5 cents to $4.51, and May Kansas City HRW prices gained 6.5 cents to $4.6750. May MGEX spring wheat futures tumbled 11 cents to $5.7850.
USDA’s estimates for winter wheat acres came in at 32.71 million acres, versus the average trade guess of 32.62 million acres. The agency is more bullish on spring wheat acres, meantime, predicting 12.63 million acres versus the average trade guess of 11.54 million acres.
All-wheat stocks fell 10% year-over-year, to 1.494 billion bushels. Trade expectations were nearly identical, at 1.493 billion bushels.
Wheat exports found 13.0 million bushels in old crop sales and another 4.5 million bushels in new crop sales for a total of 17.5 million bushels last week. That was slightly ahead of trade expectations (16.5 million bushels) and the prior week’s total of 15.8 million bushels. Japan was the No. 1 destination for export shipments last week.
EU soft wheat exports have tumbled 23% year-over-year, reaching 525.4 million bushels as of March 27.
Preliminary volume estimates were for 136,625 CBOT contracts, moderately higher than Wednesday’s final count of 93,765.
Click here to view the USDA's complete Grain Stocks report.
United States inventory of all hogs and pigs on March 1, 2018 was 72.9 million head. This was up 3 percent from March 1, 2017, but down 1 percent from December 1, 2017.
Breeding inventory, at 6.20 million head, was up 2 percent from last year, and up slightly from the previous quarter.
Market hog inventory, at 66.7 million head, was up 3 percent from last year, but down 1 percent from last quarter.
The December-February 2018 pig crop, at 32.3 million head, was up 4 percent from 2017. Sows farrowing during this period totaled 3.06 million head, up 2 percent from 2017. The sows farrowed during this quarter represented 49
percent of the breeding herd. The average pigs saved per litter was a record high of 10.58 for the December-February period, compared to 10.43 last year.
United States hog producers intend to have 3.08 million sows farrow during the March-May 2018 quarter, up 2 percent from the actual farrowings during the same period in 2017, and up 4 percent from 2016. Intended farrowings for
June-August 2018, at 3.16 million sows, are up 1 percent from 2017, and up 4 percent from 2016.
The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 47 percent of the total United States hog inventory, down from 48 percent the previous year.
Click here to view the USDA's complete Hogs and Pigs report.
Source - USDA / NASS
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