- The USDA Crop Report was bearish on stocks, but the bullish shocker was seedings as total 2020 US 8 crop seeding declined 6.72 million acres. The decline was based in corn where seedings fell 5 million acres to 92.0 million acres. This was 3 million acres more than the average trade estimate. The FSA Farm Service crop data now becomes important as analysts try to understand why US farmers did not plant nearly 7.0 million acres with improved spring weather.
- NASS estimated 2020 June 1 corn stocks at 5,223 million bu, up 22 million bu from last year with the March-June feed residual estimate at 813 million bu, down 303 from 1,116 million bu last year. The June 1 stocks were up 234 million bu from trade expectations.
- US wheat stocks at 1,044 million bu were 65 million bu larger than expected (fall in feed/residual use) while US soybean stocks at 1,386 million bu where 5 million bu larger than forecast. The US corn stocks total was a bearish surprise.
- March to June 8 crop US seeding changes were down 6.72 million acres, which is larger than last year. A year ago, NASS indicated that the extremely wet spring pushed farmers to seed just 6.0 million acres less than the March Intentions.
- This is where the confusion begins in relations to NASS. A year ago, NASS overstated US crop seedings relative to trade expectations a record amount while this year was a record large miss under trade estimates. Trying to understand or explain where all the acres went is difficult.
- NASS estimated 2020 US corn seeding at 92.0 million acres, a record miss vs trade estimates at 95.1 million acres. North Dakota corn seeding was down 800,000 acres while IL/SD was off 400,000 acres. NE corn seedings were 700,000 acres. Other states add up to the combined miss of nearly 5.0 million acres from the March Intentions. Assuming trend line yields 178.5 bushels/acre on the lost acres adds up to around 850 million bu of US corn production.
- Research notes that US 2020 soybean seeding expanded by 300,000 acres to 83.8 million acres while US all wheat acres were pegged at 44.2 million acres, down 500,000 from intentions. Lost US corn acres were expected to be planted to soybeans, but somehow producers either enrolled those acres in the Prevent Plant program or left them lay idle.
- Where do the reports leave the US stocks. WASDE is likely to cut 2019/20 US corn feed/residual by 150-175 million bu in July and make a like adjustment to the 2020/21 feed/residual for a combined 300-350 million bu cut to domestic use.
- However, USDA’s corn seeding estimate cuts 850 million bu off supplies which means that 500-550 million bu will be cut from 2020/21 US corn end stock estimates which look to drop US 2020/21 corn end stocks to a large 2,800-2,850 million bu. Such stocks would justify December corn trading in a range of $2.90-3.60 assuming trend line yield. Remember that every 1 bushels/acre above or below trend adds or subtracts 85 million bu to US corn stocks.
- 2020/21 soybean end stocks are forecast at 425-475 million bu as US seedings did not expand on corn’s loss. While 2020/21 US wheat end stocks will rise closer 940-960 million bu, which is more than adequate.
- The USDA Seeding report is hard to explain in that a year ago with horrendous cool/wet spring weather the US lost 5.6 million acres from intentions and this year the loss was 6.7 million acres with okay conditions. The report was a bullish corn shocker, but we doubt that US farmers were able to enter all those acres in Prevent Plant. Our longer-term view stays bearish, but less so than before the report on the decline in US corn/soybean seeding.