Analyzing the latest USDA report on crop stocks and acreage, and its impact on global agricultural markets
The recent USDA stocks in all positions and acreage report, released last Friday, provided crucial insights into the current state of crop inventories and planting intentions across the United States. Traditionally known for its volatility, this particular report did not disappoint, especially in the corn market where discrepancies between the USDA figures and trade estimates caused significant market reactions.
According to the USDA report, new crop corn acres totaled 91.475 million acres (Mac), surpassing the average trade guess of 90.35Mac. However, the reported corn stocks were 4.99 billion bushels (bbu), slightly higher than the trade’s expectation of 4.873 bbu. This mismatch contributed to heightened volatility in corn futures trading immediately following the report’s release.
In contrast, soybean numbers were more supportive, with stocks reported at 970 million bushels (Mbu) compared to the pre-report average guess of 962Mbu. Soybean acres were reported at 86.1Mac, 0.653Mac lower than anticipated, reflecting slight adjustments in planting intentions.
The USDA report also highlighted significant figures for wheat, reporting stocks at 702 million bushels (mbu) versus a trade estimate of 684 mbu. However, all wheat acres were 400,000 acres below the trade guess at 47.24Mac. Despite the acreage miss, the USDA noted increased harvested percentages, particularly in hard red winter wheat (HRW), projecting HRW production just below 750Mbu.
Looking beyond the numbers, market analysts and traders are closely monitoring weather conditions, especially for U.S. row crops, which appear favorable over the next 10 days. Meanwhile, challenges persist for winter crops, exacerbated by recent weather patterns in Europe and Russia. Parts of Germany received over 170mm of rain in the past 72 hours, while heat returning to the Russian grainbelt, particularly in the Volga Valley, threatens spring wheat prospects.
In Australia, recent rains brought relief to much of the growing belt, including significant precipitation in regions like Kwinana/Geraldton and the Western District (WD). GrainCorp’s National Crop Update highlighted slightly bullish sentiment for the South Australian crop, buoyed by substantial rainfall exceeding 50mm in parts of the region. In the eastern states, patchy rainfall ranging from 0-50mm is expected to benefit crop development, albeit unevenly.
The canola new crop prices closed higher last week, with bids for ISCC at Berrybank surpassing $700 per tonne, underscoring robust market demand amidst favorable growing conditions.
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