Results and Implications of the USDA Acreage and Quarterly Stocks Reports of 6/30/2014

 

Following is a KSU Summary with market implications stemming from the USDA National Agricultural Statistical Service (NASS) Acreage and Quarterly Stocks reports.  The full report is available on the KSU Agmanager.info website (http://www.agmanager.info/) at the following web address:

http://www.agmanager.info/marketing/outlook/newletters/archives/GRAIN-OUTLOOK_07-07-14_Acreage-Stocks.pdf

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Summary

On June 30th the USDA National Agricultural Statistics Service (NASS) released its Acreage and Grain Stocks reports. The 2014 Acreage report provided the second actual survey-based information by the USDA on U.S. farmer’s cropping intentions for 2014, following the March 31st Prospective Plantings report. The Quarterly June 1st 2014 Grain Stocks report provided grain markets with improved information on the pace of usage of U.S. corn, grain sorghum, wheat, soybeans, and other major crops in their respective 2013/14 marketing years. As a result of these June 30th USDA reports, adjustments are likely occur to in the upcoming July 11th USDA World Agricultural Supply and Demand Estimates (WASDE) report – particularly for “new crop” 2014/15 marketing year U.S. soybean and grain sorghum supply-demand balances and prices.

USDA Acreage Report on June 30th

The Acreage report projected 2014 U.S. corn planted acreage to be 91.641 million acres (ma), down marginally from pre-report trade expectations, and down from 95.365 ma in 2013, and the record high of 97.155 ma in 2012. Forecast harvested acres of corn in 2014 of 83.839 ma were down from 87.375 – 87.668 ma the previous two years. Planted acres of soybeans in 2014 were forecast to be a record high 84.839 ma, above the top end of the pre-report average trade estimates, and up from 76.533 ma in 2013 and 77.198 ma in 2012. Expected 2014 plantings of other spring wheat of 12.709 ma were also above the top end of the pre-report trade estimates, and up from 11.596 ma in 2013, and 12.289 ma in 2012. Projected planted acres of grain sorghum in 2014 are 7.471 ma, up 790,000 acres from the 3/31 Prospective Plantings estimate, but down from 8.061 ma in 2013, while up from 6.244 ma in 2012. Harvested acres of grain sorghum in 2014 of 6.399 ma are projected to be down from 6.530 ma in 2013, but up from 6.244 ma in 2012.

https://i1.wp.com/ethanolproducer.com/uploads/posts/magazine/2014/02/CornField-ethanol-0314_1391461602624.jpg

U.S. Corn Field (Source: http://ethanolproducer.com/articles/10708/obligation-outcomes)

USDA Quarterly Stocks Report on June 30th

The Quarterly Grain Stocks report estimated that U.S. corn stocks on June 1st were 3.854 billion bushels (bb), up from 2.766 bb a year ago. Corn use during March-May 2014 was 3.154 bb, up from 2.634 bb in Mar-May 2013 and 2.886 bb in Mar-May 2012. Projected U.S. soybean stocks on June 1st were 405 mb, down from 435 mb a year ago. Soybean use during March-May 2014 was 589 mb, up from 563 mb in Mar-May 2013, but down from 712 mb in Mar-May 2012. Projected U.S. wheat stocks on June 1st were 590 mb, down from 718 mb a year ago. Wheat use during March-May 2014 was 467 mb, down from 517 mb in Mar-May 2013, and down from 486 mb in Mar-May 2012. Projected U.S. grain sorghum stocks on June 1st were 92 mb, up from 42 mb a year ago. Grain sorghum use during March-May 2014 was 83 mb, up from 50 mb in Mar-May 2013, and from 50 mb in Mar-May 2012.

https://i2.wp.com/us.123rf.com/400wm/400/400/fotokostic/fotokostic1106/fotokostic110600020/9810430-soybean-field-with-rows-of-soya-bean-plants.jpg

A U.S. biotech Soybean Field in 2012 (Source: http://isaaablog.blogspot.com/2012_08_01_archive.html)

KSU Probability-Weighted Corn, Soybean and Wheat Supply-Demand and Price Forecasts

As a result of these reports, KSU supply-demand balance and price forecasts for “new crop” MY 2014/15 were adjusted from early June projections. The U.S. 2014 corn production forecast was lowered slightly due to lower planted acreage, while higher planted acreage for soybeans, grain sorghum, and wheat led to higher 2014 crop production forecasts. For U.S. corn prices, the KSU “new crop” 2014/15 marketing year “likely” scenario was lowered $0.20 to $4.20 per bu from a month ago. The “likely” KSU soybean price forecast outcome in “new crop” MY 2014/15 was lowered $0.75 to $9.25 per bu. For U.S. wheat prices, the KSU “new crop” 2014/15 marketing year “likely” scenario outcome was lowered $0.95 down to $6.55 per bu from a month ago.
Barring unforeseen major crop production problems in the U.S., South America, the Black Sea region, China, Australia, or other major grain importing and/or exporting regions of the World, grain and oilseed prices are likely to continue to move lower into fall 2014 until or unless either a) lower prices of grains encourage demand, b) weather problems and associated crop production losses occur among the World’s major grain producing or using countries, or c) international geopolitical conflicts support grain markets.

http://hubbubblog.files.wordpress.com/2011/10/grain-elevator.jpg

World’s Largest Grain Elevator in Hutchinson, Kansas (Source: http://hubbubblog.wordpress.com/2011/10/23/what-i-talk-about-when-i-talk-about-kansas/)

 

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