USDA estimates wheat area to be smallest since 1919

USDA estimates wheat area to be smallest since 1919

Details on potential stocks, usage and an updated expectation of acres planted in different feed grains were included in the acreage and grain stocks reports released Friday (30 June) by the US Department of Agriculture (USDA).

Corn closed sharply higher on Friday despite "bearish" June corn acreage estimate & larger than expected June 1 corn stocks. The area that is expected to be harvested has fallen to 83.5m acres a decline of 4% from previous year. The June 1 soy stocks reading was the biggest in 10 years. Acres harvested for grain was estimated at 330,000 acres, down 10,000 acres from a year ago.

"There's still concerns over weather issues for corn and soybeans", he said. "Will they get the needed rainfall or will it be dryer?"

Soybean stocks as of June 1 were 963 million bushels, up from 872 million bushels a year earlier. They extended their net long in the week ended June 27 to 44,240 contracts from 37,701 in the previous week, and the new stance is funds' most bullish on the hard red wheat since April 1, 2014 (reut.rs/2u7RyTH).

However, the amount of acres planted in corn grew from what was initially expected earlier in the year, said Todd Hubbs, clinical assistant professor of agricultural commodity markets at the University of IL.

The average trade estimate was for 89.75 million acres of soybeans and 89.9 million acres of corn. Corn planted for all purposes is estimated at 4.05 million acres-unchanged from past year, but 50,000 acres more than the previous quarter's estimate. The trade average guess was for 89.903 million acres of corn and 89.750 acres of beans.

Soybean planted area is at a record high 89.5 million acres, up seven percent from a year ago, the same as the March report. Wheat acres should be near 46.1 million acres, the same number from the March USDA report. Growers expect to harvest 83.5 million acres for grain, down four percent from a year ago. The trade was expecting to see a slight improvement following a week of cooler temperatures and increased precipitation across the Corn Belt; however that was not the case, at least on a national level.

USA farmers planted only 1.27 million acres to sunflowers, down 21 percent from 2016, with North Dakota farmers especially turning away from sunflowers. That forecast is moving Kansas City and Chicago wheat higher as well.

MGEX July spring wheat futures rose 5.8% to $8.12 a bushel, while CBOT July winter wheat climbed 5% to $5.36 3/4 a bushel-the highest in a little under two years.

With the weather doing the typical July 4 holiday of extreme weather uncertainty and huge price volatility, keep in mind that the markets will close early on Monday at 1 pm EDT, no trade Monday evening, Tuesday day or evening. Price action at the 9:30 am Wednesday re-open could be up or down big numbers.

Spring wheat futures, as traded in Minneapolis, touched $7.92 ¾ a bushel for September delivery, a gain of 7.2% on the day, and extending gains for June to 38%. November soybeans added 30 cents, or 3.24 percent, to 9.5475 dollars per bushel. In good weather years prices typically peak in June and move lower into the fall harvest.

Of course, the crops remain in the ground ahead of the most important months for corn (July) and soybeans (August).

Look for grain prices to quickly return to weather shortly after the noon USDA reports.

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