** USDA June Stocks and Seeding Report Analysis: The USDA June Stocks & Seeding report offered mixed results, but was generally taken as bullish by the marketplace amid the threat of additional warm/dry weather across the Plains and the NW Midwest. CBOT soybeans, corn and wheat futures are sharply higher at midday.
US 2017 cropped acres as estimated by NASS equaled 318,184 Mil acres, down 1,058 Mil acres from the prior year. Total US cropped acres confirmed that US farmers seeded all available acres despite low prices and profitability. Historically, the US Gov’t has to pay farmers to set aside acres, or severe flooding must occur to cut back on US seeded acres.
The USDA reported ‘17 US corn seeding at 90.9 Mil acres, up 890,000 acres from the March estimate, but down 3.118 Mil acres from last year. The cool/wet spring across the Central & Eastern Midwest did not have any adverse impact on total US corn seeding. US corn harvested acres was pegged at 83.5 Mil acres, which along with trend yield of 170.7 BPA would produce a 14,187 Mil Bu crop.
The biggest corn seeding shortfall occurred in IL at 500,000 acres while combined corn seedings in IN/OH were off just 150,000 acres. Note that N Dakota corn seeding rose 250,000 acres to 3.7 Mil acres. Total US Dakota corn seeding was estimated at 8.9 Mil acre representing 6.6% of US corn production.
** US 2017 soybean seeding was estimated at 89.5 Mil acres, virtually unchanged from the March estimate, but up 7.3% from last year to a new record. The states posting the biggest seeding gains were MN with acres up 650,000 acres to 8.2 Mil acres and N Dakota with soy seeding up 1.15 Mil acres to 7,200 Mil acres.
ARC would also note that S Dakota soybean seeding was up 200,000 acres to 5.4 Mil acres. The drought area of the Dakotas has 12.6 Mil acres of soybeans or 14% of US production. By seeding, N Dakota is the US’s 4th largest soy state!
** US 2017 all wheat seeding fell to 45.7 Mil acres, the lowest US total since USDA started keeping records back to 1919. US winter wheat acres held steady from the March report while spring acres fell another 330,000 acres to 10.9 Mil acres. US durum wheat seeding was also lower and there are supply bull stories in both HRS and durum wheat going forward. ARC notes that US HRS harvested acres are likely to decline farther in future reports depending on weather conditions. The marketplace will need to secure additional US spring wheat area in 2018 which will likely curtail US corn and soybean area.
** US corn stocks as of June 1st were 5,225 Mil Bu, up 514 Mil Bu from last year and a record. 3rd quarter US corn use was estimated at 3,400 Mil Bu, up 290 Mil Bu. The June 1st US corn stocks total was above the average trade estimate and considered slightly bearish. The 3rd quarter feed/residual use estimate is estimated 978 Mil Bu, up 54 Mil Bu. ARC does not expect WASDE to alter their annual US corn feed/residual use rate in the July WASDE.
** US June 1st wheat stocks were estimated at 1,184 Mil Bu, the high end of trade estimates and up 208 Mil Bu from last year. 4th quarter feed/residual is calculated at a -57 Mil Bu which compares to -37 Mil Bu in the year before. June 1st wheat stocks define totals for the 2016/17 crop year.
** US June 1st soybean stocks were 963 Mil Bu, down 20 Mil Bu from trade estimates, but 91 Mil Bu above last year. 3rd quarter US soybean use was record large based on strong US export demand.
** Midday GFS Weather Model Update: The midday GFS is drier in mid-July. The model expands a high pressure Ridge beginning next week and at times this Ridge will inch into the heart of the Midwest. Confidence in the details of the forecast are improving, but a tropical storm late in the 14 day forecast makes the last few days of the model less certain. High temps will reach the 90s and low 100s as far east as MN/W IA/KS in the 11-15 day period. The E Corn Belt will be more temperate, but the model lacks meaningful rain beyond the next 5-6 days.
** AgResource Market Comment: No new sales are advised as less than favorable weather invades the Central US with the drought across the N Plains likely to expand south and east into the last half of July.
