A pair of USDA reports underlined the tightness of US grain supplies and the difficulties confronting new crop production. The USDA June Acreage report showed a smaller-than-expected increase in acreage for corn and soybeans. And the Quarterly Stocks report showed an 18% drop in corn stocks, and a 44% slump in soybean stocks, from a year earlier.
December corn futures jumped 7.3%, to close limit up, while November soybeans rose 6.6%.
Farmers planted a combined 180.2 million acres of corn and soybeans, including 92.7 million for corn and 87.6 million for soybeans. Corn area increased 1.5 million acres, and soybeans declined 45,000 acres, from the USDA’s March Prospective Plantings report.
The latest USDA acreage estimates are now in line with Gro’s projections made in mid-March, as forecast by the Gro machine-learning-based Planting Intentions Model, for soybean acreage of 88.6 million acres, and corn at 93.1 million acres. This underscores the ability for using data powered by machine-learning models to predict government indicators, in the US and around the world, well in advance of their being released.
The USDA reports together underscore the urgency for good weather to produce strong yields in the current season in order to keep stocks from falling sharply, particularly as the Western Corn Belt continues to labor under drought stress, as reflected in Gro’s Drought Index.
The Quarterly Stocks report showed corn stocks of 4.144 billion bushels (105.3 million tonnes) as of June 1, down 18% from a year earlier and the lowest reading since 2014. Soybean stocks, down a staggering 44%, were at the lowest June 1 level in six years.
Strong US cash prices and inverted futures prices indicated very strong demand all quarter. Gro’s Futures Spread App can quickly chart and analyze price relationships.
The northwestern Corn Belt looks hot and dry for the next two weeks and will continue to hold down production potential. A sharp increase in price will be required to ration demand where needed. Follow Gro’s in-season Corn and Soybean Yield Forecast Models for up-to-date readings on available supply.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.