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The day of reckoning that everyone has been waiting for over the past several weeks finally arrived. USDA projects planted corn acres at 94.1 million. This exceeded the highest trade guess and compares to 93.6 million acres in March and 87.9 million in 2015. Stocks as of June 1st are forecast at 4.722 BB, up 266 MB from a year ago and the highest in 28 years. In other developments, the crop rating held the 75 percent mark in good-to-excellent condition for the fourth straight week, and compares to the ten-year average of 68 percent. According to Ag Watch’s yield model, this translates to a national yield of 173.2 bpa compared to USDA’s estimate of 168.0 bpa. Export inspections were exceptional last week at 57.1 MB, and are on track to reach USDA’s projection of 1.825 BB. The funds have reduced their long position 160 MB to 1.2 BB; however, 1.0 BB of their longs are in the red keeping the prospect open for additional liquidation.
USDA projects planted acres of soybean at 83.6 million, which was 282 million below the trade estimate. Some estimates were as high as 85.0 million. This compares to their forecast of 82.3 million in March and 82.6 million acres planted in 2015. Stocks as of June 1st are projected at 869 MB for an increase of 242 MB from a year ago. Although the reports were not bullish, they were better than expected. In other developments, 72 percent of the soybean crop is rated in good-to-excellent condition, which is a record for this time of the year, and compares to the ten-year average of 64 percent. According to Ag Watch’s yield model, this equates to a national yield of 49.8 bpa compared to USDA’s estimate of 46.7 bpa. Export inspections were routine last week at 9.9 MB with China only taking a token shipment. The funds are active and reduced their longs 110 MB to 965 MB. However, the commercials are short 1.370 BB, and are at opposite poles with the funds. In the past when such an extreme has occurred, it eventually led to the bulls derailment.
Wheat continues to wallow in a pit. USDA projects all wheat acres at 50.8 million, which was 1.1 million above the trade guess and compares to 49.5 million in March and 54.6 million a year ago. Winter wheat acres are forecast at 36.5 million compared to 36.2 million in March and 39.4 million in 2015. Stocks as of June 1st are projected at 981 MB versus 752 MB a year ago. In other developments, harvest is 45 percent done compared to the average of 41 percent. Export inspections were 18.8 MB and above the average needed to reach USDA’s target of 900 MB. The funds turned more bearish as they increased their short position 65 MB to 450 MB.
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