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The acreage report this week caught the bears attention as USDA’s corn estimate of 92.0 million acres was 3.2 million less than traders expected. As a result, production could be lowered 1.0 BB, while 2020-21 ending stocks might fall 875 MB. This would put ending stocks at 2.450 BB versus the current estimate of 3.323 BB. While there are no major weather threats now, above normal temperatures forecast through mid-month will keep weather in the spotlight. Currently, seventy-three percent of the corn crop is rated in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 180.8 bpa versus USDA’s estimate of 178.5 bpa. As of last week, the funds were short a near record 1.6 BB and are covering. Looking at exports, inspections were 48.6 MB and are running nip and tuck to reach USDA’s target of 1.775 BB.
The acreage report was termed friendly for soybeans as it was less than expected at 83.8 million but is 315,000 acres above March and 7.7 million more than a year ago. China bought 126,000 tons on Thursday for the 2020-21 crop. They have been absent the past couple of weeks. Last week, export inspections were mediocre at 11.9 MB. Since peaking in November, shipments have fallen 82 percent which is pushing the high side of the norm. In other developments, the crop is off to a good start with 71 percent rated in good-to-excellent condition. This is one-point below the highest rating of 72 percent that was set in 2018. According to Ag Watch’s yield model, this translates to a national yield of 51.1 bpa compared to USDA’s estimate of 49.8 bpa. Keep in mind that the increase in acres over the March report and a year ago implies that China’s business is needed.
There is little fresh news in wheat. Harvest is 41 percent complete which is par for the average. Meanwhile, the rating for the spring crop fell 6 points last week to 69 percent in good-to-excellent condition. Export inspections last week were 18.9 MB and are on track to reach USDA’s projection of 950 MB. Although USDA’s all wheat acreage estimate is down 908,000 from last year at 44.2 million, record global stocks are a sticking point
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