Welch on Grain: More Acres, Larger Stocks for Wheat, Corn

    Market Situation

    Acreage.  More acres and larger stocks reported this morning in the Acreage and Grain Stocks reports from USDA.  Corn acres came in at 94.1 million, up from 93.6 million in the planting intentions survey in March and 88 million last year.  The acreage reported is over 1 million acres higher than the average trade guess.  As expected, soybeans are up from the March intentions, 83.7 million from 82.2 million and in line with trade expectations, 83.8 million.

    Winter wheat acres of course were pretty well set, but higher acreage than expected was reported for spring wheat.   Sorghum acres are in line with trade expectations and right at the March intentions survey.

    Grain Stocks.  Corn in all positions as of June 1 was 4.722 billion bushels, up 6% from a year ago and up 32% compared to the most recent 5-year average.

    Soybean stocks of 870 million bushels is 39% higher than last year at this time.

    Wheat stocks at the end of the 2015/16 marketing year on June 1 are 981 million bushels, up 30% from 2014/15.  The most recent estimate for 15/16 ending stocks in the June WASDE was 1.050 billion.  As reported last week, cash wheat prices are competitive with other feed grains, likely causing an increase if feed use.

    Weather.  The market impact of today’s higher acreage number may have been offset by somewhat by weather concerns.  The Drought Monitor this week showed a decline in the overall drought condition in the Midwest but a slight increase in intensity.  The level of moderate drought increased about 1%.

    In the western Corn Belt, North Dakota was 14% abnormally dry and 3% moderate; South Dakota 23% abnormally dry, 33% moderate, and 5% severe, and 1% extreme; Nebraska 33% abnormally dry, 2% severe; and Kansas 21% in the abnormally dry category.

    Marketing Strategies

    2016 Feed Grain Marketing Plan.  Corn went down about 14 cents as the Acreage and Grain Stocks reports were released then recovered about half those losses.  The next marketing objective in my marketing plan is to add to 2016 feed grain sales in the current timeframe leading up to the August crop report.

    2017 Wheat Marketing Plan.   My focus now turning to the 2017 crop, I will use the same marketing plan format and begin the budget process to set marketing targets.

    Upcoming Reports/Events. 

    July 1 – Registration open for The Executive Program for Agricultural Producers (TEPAP), January 8-14, 2017
    July 12 – Crop Production; WASDE; Short-term Energy Outlook
    July 22 – Cattle on Feed

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