USDA Worksheet and Weather Outlooks - Wednesday, 08 June 2016

The June USDA Supply and Demand report will be released this Friday, June 10th.  The trade will be particularly interested in the soybean ending stocks number and also to what extent the USDA will raise their estimates for exports and domestic crush.  If we see an increase of +25 to +50 million bushels, as many sources believe is possible, the trade will likely become considerably more uneasy about ending stock supplies. 

The expectation for corn is not as clear.  The trade is expecting bullish news regarding the corn export number but is less confident that the USDA will make the necessary adjustments to their estimates in the June report, but instead may make this more significant adjustment in a later report.  On June 30th the USDA will announce the Acreage and Grain Stocks report.  Kevin Van Trump of the Van Trump Report expects “the USDA will deliver a less bearish acreage scenario on June 30th, perhaps -500,000 to -1.0 million fewer acres of corn will be revealed”. 

Here is a Worksheet for the USDA report on Friday:

U.S. Ending Stocks 2015/16

 

June Est.

Average Trade Est.

Trade Range

USDA May

Corn

???

1.772

1.728 - 1.820

1.803

Soybeans

???

0.385

0.355 - 0.400

0.400

Wheat

???

0.981

0.953 - 1.00

0.978

U.S. Ending Stocks 2016/17

 

June Est.

Average Trade Est.

Trade Range

USDA May

Corn

???

2.125

1.973 - 2.441

2.153

Soybeans

???

0.289

0.215 - 0.350

0.305

Wheat

???

1.045

1.007 - 1.100

1.029

World Ending Stocks 2015/16

 

June Est.

Average Trade Est.

Trade Range

USDA May

Corn

???

206.00

204.50 - 208.50

207.87

Soybeans

???

72.73

70.00 - 74.00

74.25

Wheat

???

242.48

241.00 - 243.20

242.91

World Ending Stocks 2016/17

 

June Est.

Average Trade Est.

Trade Range

USDA May

Corn

???

205.18

204.00 - 208.00

207.04

Soybeans

???

66.67

65.00 - 68.01

68.21

Wheat

???

257.80

255.00 - 261.43

257.34

U.S. Wheat Production 2015/16

 

June Est.

Average Trade Est.

Trade Range

USDA May

All Wheat

???

2.014

1.898 - 2.128

1.998

All Winter

???

1.451

1.413 - 1.545

1.427

Hard Red Winter

???

0.883

0.862 - 0.980

0.863

Soft Red Winter

???

0.355

0.332 - 0.367

0.357

White Winter

???

0.211

0.205 - 0.220

0.208

South American Production 2015/16

 

June Est.

Average Trade Est.

Trade Range

USDA May

Brazil Corn

???

79.00

76.00 - 81.00

81.00

Brazil Soybeans

???

98.16

97.00 - 99.00

99.00

Argentina Corn

???

26.81

26.00 - 27.00

27.00

Argentina Soybeans

???

55.69

54.50 - 56.50

56.50

 

All of the components in the U.S. markets are made even more critical when paired with the weather and shipping issues currently found in South America. Soybean and Corn Advisor, Imea, recently reported that the second crop corn (Safrinha) in Brazil is continuing to worsen.  The Mato Grosso Institute of Agricultural Economics now estimates the 2015/16 safrinha crop at 21.24 MMT, this is down 1.85 MMT from the 23.09 MMT that was estimated just 1 month ago.  Imea also estimated that slightly over 1% of the crop in Mato Grosso has been harvested and yields have been running around 7 bushels an acre.  If this is accurate the statewide yield will be less than 1/4th the yield found a year ago.   The rate increase in the cost of transporting grain in Argentina has been authorized by the government of the Buenos Aires providence and rates will now be increased to 23.5%.  This providence is the biggest growing region in Argentina of corn, soybeans and wheat.  Producers are displeased with the discussion but ultimately the costs will likely be passed along to the purchaser which in turn makes supplies from Argentina less competitive with other suppliers across the globe including those from the U.S.

Not everything is rosy in the U.S. though either.  Several farm groups including the National Sustainable Agriculture Coalition and Farm Credit Council sent a letter a week ago to inform the Senate and House Agriculture appropriation panels that the Farm Service Agency expects to run out of money used to make operating loans to farmers in June.  Demand for these loans is so high right now that farmers that apply and get approval this year won’t receive funding until the fiscal 2017 appropriations bill is enacted.  The letter submitted to the panel explained the situation in this way, “This substantial shortfall will leave many beginning farmers, and others who cannot be fully serviced by commercial credit under current price conditions without the loans they need to stay in business.  It will also create a backlog and long waiting list for fiscal 2017.”

Monday the USDA released their weekly Crop Progress report showing that 98% of the corn crop in the U.S. is now planted, 90% has emerged and 75% is considered to be in “Good to Excellent” condition which is up slightly from last week.

 

The U.S. soybean crop was found to be 83% planted, 65% emerged and 72% was rated to be in “Good to Excellent” condition.

 

 

Temps have been and are expected to continue to soar 8 to 15 degrees above normal across much of the western half of the U.S. this week making June 6-12th,  the 4th warmest out of the last 25 years as well as the 2nd driest overall for the U.S.  The 2016 Hurricane season has begun and the 3rd name storm of the season, Colin, made landfall near Tampa Bay, FL and has brought excessive rainfall, high winds and waves 8-10 feet above normal.  This storm may not make it into the “hurricane record books” but the early arrival in the season is significant.  The formation of 3 named storms by this early point in the season has set a new “modern day” record, the last time there was 3 named storms by June 11th was in 1887!! 129 years ago!

The outlook for June 11-15th anticipates above normal rainfall and a continuation of the above normal temperatures across the U.S. with the exception of both the Northeast and the Northwest.  The later portion of June is still expected to turn hot and dry for much of the country and WeatherTrends 360 predicts this summer on average will be the hottest and driest summer we’ve seen in 4 years across the U.S. overall.

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