USDA Reports Preview

At 11 a.m. CDT on Friday, June 28, USDA will release its Acreage report and quarterly estimates of Grain Stocks for June 1. Given the adverse challenges to early planting and crop conditions, don't be surprised if the planting estimates need to be revisited in August.

CORN

In its March survey of early planting intentions, USDA estimated 90.0 million acres of corn would be planted in 2024, down from 94.6 million in 2023. Given the low bar of expectations, it seemed like planting 90 million acres would be easy, but an unusually stormy spring made planting difficult after late April. In some wet areas like Minnesota and Wisconsin, even replanting became difficult.

I'm sorry to say, but because USDA's planting estimates are based on its survey in the first two weeks of June, Friday's estimates won't offer much useful information. Widespread flooding in the northwestern Corn Belt that occurred on the fourth weekend of June disrupted the normal assumptions that all is well. We shouldn't be surprised if USDA announces a second survey of planted acres to be released in August, roughly the same time the Farm Service Agency will issue its first report of prevented plantings. 2024 corn production will hinge on harvested acres, not this year's planting estimates.

Unfortunately, traders seem to have a more bearish view of prices, which may be reinforced on paper by Friday's shallow planting estimates. According to Dow Jones' survey of 18 analysts, USDA will estimate 90.27 million acres of corn were planted in 2024.

For this analyst, USDA's Grain Stocks report remains the most important report the agency issues, based on an actual effort to take physical inventory. Dow Jones' survey expects USDA to find 4.867 billion bushels (bb) of corn in storage as of June 1, up from 4.103 bb a year ago and the most in four years.

Dow Jones' estimate implies three-quarters of corn demand would have totaled 11.86 bb, but that is less than it was two and three seasons ago, when corn supplies were tighter. With all three legs of corn demand looking active in 2023-24, there is a good chance June 1 corn stocks will arrive less than expected. It will also be interesting to see how much corn is still held on farms, last seen at 5.08 bb in March. For reference, DTN's National Corn basis is the fourth strongest in 10 years, priced 14 cents below the July contract.

SOYBEANS

USDA's March planting intentions expected 86.5 million soybean acres in 2024, up from 83.6 million in 2023. Knowing that spring weather packed a big punch of severe weather, heavy rains, hail and tornadoes in 2024, it is fair to wonder if those difficult conditions led to more soybean planting. Dow Jones' survey expects USDA will estimate 86.86 million acres Friday, but there is room for a higher number.

As with corn, we shouldn't take Friday's soybean planting estimate too seriously, as it is harvested acres that matter, and that number is being threatened by June flooding. Not yet knowing how many acres are affected and how long soybeans will stay underwater, it is too early to make a good guess of how much production will be lost. DTN Ag Meteorologist John Baranick explained Tuesday that in the current pattern, the northern Corn Belt still has chances for more rain and severe weather ahead (see https://www.dtnpf.com/…).

For June 1 soybean stocks, Dow Jones' analysts expect USDA to estimate 957 million bushels (mb) in storage, up from 796 mb a year ago. USDA is currently estimating U.S. soybeans will finish the 2023-24 season with 350 mb of ending stocks. It is interesting that Dow Jones' estimate of 957 mb is a little below the 968 mb of June 1 stocks this report showed two years ago in a season that ended with 274 mb of ending stocks.

Currently, U.S. soybean exports are limited by cheaper prices in Brazil, but domestic crush demand remains active. Cash soybean meal in Illinois is priced well above the futures board, and USDA currently estimates soybeans' processing value in Illinois at $14.29 a bushel. U.S. soybean crush activity in 2023-24 has been running nearly 4% above last year's pace and has good reason to continue.

WHEAT

Dow Jones' analysts expect USDA to estimate 47.58 million acres of wheat planted for the 2024-25 season, down from 49.58 million acres a year ago. Winter wheat acres are estimated at 34.16 million, down from 36.70 million last year. Spring wheat acres are expected to total 11.36 million, up slightly from 11.20 million a year ago. Durum acres are expected at 2.00 million acres, up from 1.68 million last year. Overall, wheat acre estimates have been stable since March, and any dissent on Friday is apt to be small.

USDA's June 1 wheat stocks are also the ending stocks for the 2023-24 season, last estimated at 688 mb earlier this month. Dow Jones' analysts expect USDA to find a slightly lower inventory of 682 mb on hand, up from 570 mb a year ago. If true, it would be the third lowest total of U.S. ending wheat stocks in 10 years. Unless USDA has a surprise in store -- possibly a higher count of spring wheat plantings? -- Friday's report should have little impact on wheat prices.

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Join us for DTN's post-report webinar at 12:30 p.m. CDT on Friday, June 28, as we examine and discuss USDA's latest estimates. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Friday's Acreage and Grain Stocks report webinar: https://www.dtn.com/….

Todd Hultman can be reached at todd.hultman@dtn.com

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