AgriVisor Morning MarketWatch

Wednesday, July 01, 2020
There is little doubt we will see continued reaction to yesterday’s USDA acreage and stocks reports in today’s session. The most interest remains on acreage and how many planted acres will actually be harvested. The harvested acres in yesterday’s data came out at 84 million on corn, 83 million on soybeans, and 36.7 million for wheat. The most attention was on corn, as this total was 5.6 million fewer than what is being used in current balance sheets. If we use the “new” harvested acres number of 84 million and the current corn yield at 178.5 bushels per acre it puts production at 14.99 billion bu, a full 1 bbu under the current crop forecast. If corn yield is closer to trend at 173.2 bpa, which is what more field scouts are using in their projections, the corn crop drops to just 14.5 bbu, or 1.5 bbu under the USDA projection. If everything remains constant on usage, this will nearly cut new crop ending stocks in half. The other figure from yesterday’s release is the decrease in soybean reserves from a year at 1.386 bbu. While this was in line with trade estimates, it was a 397 mbu decrease from last year. Very few adjustments were made to wheat acreage or stocks from what trade was expecting. Now that this data is out of the way, trade will start to incorporate the data into the USDA balance sheets. This will be closely watched in the July WASDE report. Trade will also be closely watching yield estimates over the next few weeks and trying to better determine actual crop size. More attention will also fall on the heat that is building in the heart of the Corn Belt, with above to much above normal precipitation being forecast for the next two weeks. 

* US acreage still debated
* Hong Kong special status revoked
* US agrees to food safety export certificates
* World Covid cases top 10 million
* US businesses become hesitant to reopen
* China starting to doubt Phase 1 import goals
* Large variance in US crops
* Drought continues in Argentina
* SAM currency continues to soften
* Lower demand may negate smaller US production
* Trade now focused on July WASDE

* US corn acres 92 million planted, 84 million harvested
* June 1st stocks 5.22 billion bu
* 2019 stocks were 5.02 bbu
* Privates estimate corn yield at 173.5 bpa
* US carryout could drop in half for 2020/21

* Planted acres at 83.8 million, 83 million harvested
* June 1st stocks at 1.38 bbu
* Stocks -397 mbu from last year 
* Private soy yield at 49 bpa, USDA at 49.8 bpa
* Chinese demand again questioned 

* Planted acres at 44.3 million, harvested at 36.7 million
* June 1st stocks at 1.04 bbu
* 2019 stocks were 1 bbu
* EU officials lower crop by 4.3 mmt
* US mills pull bids ahead of harvest

* Cattle slaughter -6% from last year
* Wholesale boxed beef lower
* China bans pork from some Brazil packers
* Another Chinese hog flu discovered
* China bans imports of US poultry

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