Northern Ag Network
posted on June 29, 2012 09:37 :: 568 Views
by Katic Micik, DTN Markets Editor
WASHINGTON (DTN) -- There were few surprises in this morning's Grain Stocks and Acreage reports for corn, while soybean acres came in toward the high end of expectations and quarterly soybean stocks were larger than traders expected.
Friday's reports could be considered neutral to bearish for corn and bearish for beans and wheat, said DTN Analyst John Sanow.
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Soybeans gained the 2.18 million acres from USDA's March Prospective Plantings report with the new estimate coming in at 76.08 ma, which was toward the high end of trade expectations.
USDA increased corn acreage by 550,000 acres to 96.41 ma, higher than the average trade guess but within the range expectations.
All wheat acreage came in at 56.02 ma, just slightly higher than March's estimates but toward the low end of the industry's expectations. Spring wheat acreage was pegged at 12 ma while USDA estimates farmers planted durum wheat on 6.21 ma.
Cotton acres came in at 12.64 ma, below the lowest trade estimate and 560,000 acres lower than its March estimate.
"Despite a larger-than-expected acreage numbers for corn and beans, the market simply doesn't care," Sanow said. "Stifling heat across the Corn Belt and bullish outside markets are taking control at this point. Plus, the 720,000-acre increase in corn and 2.18 million acre jump in beans from the March numbers are tempered by an expected drop in yield due to hot, dry conditions."
In the quarterly grain stocks reports, corn stocks were estimated at 3.149 billion bushels, slightly below the average trade estimate. It's the smallest third-quarter stocks estimate since 3.04 bb in June 1998.
USDA also increased its March corn stocks estimate from 6.009 bb to 6.023 bb. Soybean stocks came in just above the trade's estimate at 667 mb, above trade guesses of 640 mb. USDA slightly revised its March stocks number upwards from 1.372 bb to 1.374 bb.
USDA estimated wheat stocks at 743 mb, within the range of trade estimates.
"The quarterly stocks report should be considered bullish for corn, bearish for beans and wheat," Sanow said. "Quarterly demand for corn reflects above-average use for the third quarter, implying ending stocks of 745 mb assuming only average demand is seen in the fourth quarter. Both bean and wheat quarterly stocks came in above expectations, though both will be questioned given the firming national average basis levels despite the strong rally over the past two weeks.
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