June Acreage report contained a larger-than-expected estimate
of planted and harvested acreage of corn for grain in the U.S.
this year. Planted acreage of corn is estimated at 78.947 million,
nearly 3.2 million more than planted last year and only 100,000
less than revealed in the March Prospective Plantings report.
The market had anticipated more than a million acre reduction
from March intentions. Acreage is less than indicated in March
in Indiana and Ohio, but exceeds intentions in Illinois, Iowa,
and Minnesota. The USDA projects harvested acreage of corn for
grain at 72.081 million, 3.273 million more than harvested last
year. Harvested acreage of feed grains (corn, sorghum, oats, and
barley) is projected at 87.121 million, 3.535 million more than
harvested last year. A decline in sorghum acreage is more than
offset by an expected increase in harvested acreage of oats and
planted acreage of corn exceeded expectations, the market remains
concerned about the potential size of the 2002 harvest. There
has been a recent tendency for the final estimate of planted acreage
to be less than the June estimate. That has been the case in each
of the past 7 years and in 9 of the past 10 years. The difference
has been as little as 24,000 acres and as much as 1.32 million
(1995). More than acreage, however, the market is concerned about
potential yield of the 2002 crop. Late planting in the eastern
corn belt is being followed by above normal temperature and lack
of precipitation in many areas. That pattern is expected to continue
in the first half of July.
to concerns about crop size, the corn market also received some
support from the USDA's June Grain Stocks report. That report
showed that June 1 inventories of corn totaled 3.594 billion bushels,
330 million less than on the same day last year and about 15 million
less than the average trade guess. Exports during the third quarter
of the 2001-02 marketing year were about 50 million bushels larger
than during the same quarter last year and domestic use was nearly
30 million larger.
the USDA's June Acreage report revealed plantings of 72.993 million
acres, 1.112 million fewer than planted last year and only 27,000
more than indicated in March. The market had anticipated a much
larger increase due to the lateness of planting the corn crop
in the eastern corn belt. Soybean acreage is larger than March
intentions in Arkansas, Indiana, Mississippi, and Ohio, but those
increases were offset by declines in Illinois, Iowa, Michigan,
Minnesota, and North Dakota. The USDA projects harvested acreage
of soybeans at 72.029 million 971,000 less than harvested last
year. Like corn, there is a tendency for the final estimate of
soybean acreage to be less than the June estimate. That has been
the case in each of the previous 5 years and 8 of the past 10
years. Except for 2001, the changes from June to the final acreage
estimate were generally small.
June Grain Stocks report revealed June 1 soybean inventories of
684 million bushels, about 24 million less than on the same date
last year and about 5 million less than the average trade guess.
Exports were down nearly 70 million bushels in the third quarter
of the marketing year compared to the same period last year, but
the domestic crush was about 24 million bushels larger.
than expected estimate of planted acreage of soybeans, along with
less than ideal growing conditions, creates a lot of uncertainty
about the potential size of the 2002 U.S. crop. The crop may be
small enough to require a reduction in the rate of use of U.S.
soybeans during the 2002-03 marketing year.
the USDA's June Acreage report indicated that planted acreage
of all classes of wheat was about 1 million more than indicated
in March. Most of the increase, 877,000 acres, was in spring wheat
other than durum. Still, harvested acreage of all classes of wheat
is expected to be about 1 million less than harvested last year
even though seedings are up by about 470,000 acres.
soybean prices will continue to be influenced by weather conditions
and crop conditions as reflected in the USDA's weekly report.
Historically, weather markets tend to result in corn and soybean
prices peaking in the pre-harvest period. However, there are some
recent exceptions to that rule. In 1993-94, the full impact of
weather on production was not revealed until January after harvest,
resulting in cash prices peaking later in the year (January for
corn and May for soybeans). In 1995-96, a small crop was followed
by extremely strong demand, resulting in cash prices peaking in
July for both corn and soybeans.
University of Illinois