by Pat Hill DTN Markets Editor
Wednesday, June 30, 2010
Corn acreage is up 2 percent and soybean acreage is up 2 percent over a year ago, according to USDA’s Planted Acreage report released early Wednesday.
But the corn area is down from levels indicated in the March Planting Intentions report and well below most analysts’ expectations, and the soybean acreage is near the top of trade guesses, so the report should be viewed as bullish for corn and bearish for soybeans and wheat when trade resumes later this morning, said DTN Analyst John Sanow.
In a separate report, USDA said June 1 quarterly corn and soybean stocks were near year-ago levels, and wheat stocks were above a year ago. Both corn and soybean stocks were below pre-report estimates, so the stocks report should be considered bullish for corn and beans and bearish for wheat, Sanow said.
Corn growers planted 87.872 million acres this spring, USDA reported, based on surveys of producers the department conducted in the first two weeks of June. The largest increases compared to last year were reported in Illinois and Kansas, each up 600,000 acres from 2009. The largest decrease was in Iowa, down 400,000 acres, and Nebraska and South Dakota are each down 350,000 acres from 2009, USDA said.
“A bullish surprise came from corn where many thought acreage would increase ahead of the report; instead, the 87.87 million acres came in below the low side of pre-report estimates,” Sanow said.
Soybean planted acreage for 2010 is estimated at a record-high 78.868 million acres, which could result in a record-large harvested area. Planted acreage was up by 300,000 acres or more from last year in Iowa, Kansas, Minnesota and Nebraska, while the largest declines were in Arkansas and North Carolina.
All-wheat acreage is now pegged at 54.305 million acres, up from 53.8 million acres estimated in the March Prospective Plantings report but below the 59.133 million acres seeded last year. Spring wheat is pegged at 13.907 million acres, near the high end of traders’ expectations. Durum acreage is estimated at 2.675 million acres, up from 2.200 million acres in the March report the 2.554 million acres planted a year ago.
All cotton plantings for 2010 are now estimated at 10.909 million acres, up from 10.505 estimated in the March Prospective Plantings report, above the average trade guess of 10.85 million acres and 19 percent more than a year ago.
For the three crops, corn, soybeans and wheat, planted acreage of 221 million acres is about 300,000 acres above the acreage indicated in the March Planting Intentions report and 2 million acres below that of 2009.
For the “principal crops” corn, soybeans, wheat, sorghum, oats, barley, rice, peanuts, sunflower, cotton, dry edible beans, potatoes, proso millet, sugar beets and canola, acreage is 318.9 million acres, down from 319.3 million acres in 2009. The big decrease in wheat acreage (4.8 million acres) and smaller cuts in sorghum, barley and oats were partly offset by increases in soybeans, corn, cotton, rice and canola.
In the Grain Stocks report as of June 1, USDA said corn stocks totaled 4.310 billion bushels, up from 4.261 b bu a year ago, but below even the low end of trade expectations. This low number may revive questions about 2009 production, test weight issues and feed use that have been circulating all year, and it will likely heighten interest in the July supply and demand report that USDA is scheduled to release July 9.
“Another bullish surprise for corn was the projection of 4.31 bb in ending stocks, well below the low side of estimates,” Sanow said. “This means quarterly demand was 22.8 percent of total supplies, and the largest since the 1995-1996 marketing year. If fourth quarter demand is similar, it would put ending stocks below 1.3 bb.”
June 1 soybean stocks totaled 571 million bushels, below the low end of trade guesses, and also likely to generate speculation about how the tighter stocks may affect the supply and demand tables going forward.
“Soybeans decreased more than expected to 571 mb, not all that surprising considering the inverted old-crop futures spreads,” Sanow said. “This means ending stocks will draw closer to the 100 mb mark.”
June 1 wheat stocks totaled 973 million bushels, above the 930 m bu in USDA’s June supply and demand report. Analysts likely will look at this number and its implications for an even bigger ending stocks projection for the new crop — and continued bearish supply fundamentals.
“Wheat stocks came in above the average estimate, meaning ending stocks for 2010-2011 could climb above 1 bb,” Sanow said.
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Posted with DTN permission by Haylie Shipp.