Today’s reports from USDA were watched with great detail and attention. Key in today’s report were several factors that include, the 2015 corn yield, 2015 soybean acre, and ending stocks for 2015 corn, soybeans, and wheat. Weather will be a huge factor for the next six weeks. The May USDA supply and demand report marks the first supply and demand table for 2015 corn, soybeans, and wheat.
Traders overall were looking for a small increase in old crop corn and wheat ending stocks. Soybeans were expected to see a small decline. Prior to the noon release of the USDA report, corn was down 1 cent, soybeans were up 4 cents, while wheat was up 7 cents. Following the report at 12:25 pm, corn was up 3 cents, soybeans were down 10 cents, with wheat up 6 cents.
Corn acres for 2015 were left unchanged from the March 31 report at 89.2 million acres. The yield was also unchanged at 166.8 bushels per acre. Soybean acres for 2015 were also unchanged from the March estimate at 84.6 million acres. The biggest negative for soybeans, the 2015-16 ending stocks, estimated to be 500 million bushels. Traders put that number at 443 million bushels.
Diving into all of the corn numbers, corn ending stocks went up but less than expected. Corn ending stocks for 2014-15 were estimated at 1.851 billion bushels, up 24 million bushels from April. Exports were increased 25 million bushels to 1.825 billion bushels. This is a bit of a surprise for corn. Export loadings have been better than expected in recent weeks. However, the US does face strong competition from around the world for corn exports. The ethanol number was unchanged at 5.2 billion bushels. Corn ground for ethanol was at its lowest number last week of any in the past four months. Ethanol will be one to watch in coming months. We have seen some ethanol plants the past month take earlier than normal down time for maintenance. Don’t be surprised to see the ethanol number reduced this summer.
The rapid corn planting progress seen already in May had the US corn planted at 75%. The five-year average for this date has US corn planted at 57%. The Ohio corn planting progress was 55%.
Don’t be surprised to see USDA increase their projected yield for 2015 corn. This has been much discussed this past week. Earlier in February at their annual USDA outlook conference they put the corn yield at 166.8 bushels per acre. Many have thought that due to rapid planting progress the yield could be raised ever so slightly. However, it was not a clear cut majority thinking of an increase. It is just very early in the corn growing season.
In addition to the new crop 2015 supply and demand tables, USDA also projected US wheat production. Traders were looking for all wheat production and winter wheat production to be higher than last year. Hard red winter and white winter wheat were expected to increase as well. Soft red winter wheat production had been expected to decrease compared to last year.
Great planting weather across the Midwest has been the theme the past 2-3 weeks. Early this month areas of Iowa, Illinois, Nebraska, and Minnesota had corn planted at 75% planted or more. Yet, in Ohio very little corn had been planted. A very odd occurrence was taking place. However, they quickly made up ground. “Petal to the metal,” has been rampant in Ohio the past two weeks. Many report that corn was planted from start to finish absent of any rain delays, in ten days or less. Rain fell across much of central Ohio and other areas yesterday afternoon and evening. Precipitation amounts ranged from ½” to 1.5” For many it was a perfectly timed rain that will go a long way towards getting corn up quickly and off to a fast start. Various reports indicate that corn is emerging in five days, a feat very unusual for May.
Corn shorts continue to be in control as demand is projected to be reduced from USDA. The rapid planting progress along with recent rains will keep the quote, “rain makes grain,” a constant thought in the market.
Weather is going to be key until at least July 4th. With the rapid corn planting progress seen this month, it means a lot of corn was planted in rapid fashion due to dry soils. Any hints of dry weather can be manifested sooner than normal .