Floor Talk, June 28, 2019 (Report Day)

[marketeye]

*Note: USDA announced Friday that it will resurvey 14 states, regarding planting acreage, due to flooding and inclement weather. The results of the survey will be released August 12, 2019.

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At the close:

At the close, the Sep. corn futures finished 21¢ lower at $4.24 3/4, bouncing off a daily limit low of $4.20. Dec. corn futures closed 19 1/2¢ lower at $4.31 1/4.

Aug. soybean futures closed 10 3/4¢ higher at $9.04 1/2. November soybean futures finished 10 3/4¢ higher at $9.23.

Sep. wheat futures closed 19 1/2¢ lower at $5.27 1/4.



August soymeal futures closed $2.10 per short ton higher at $315.30.

 August soy oil futures ended $0.44 higher at 28.37¢ per pound.



In the outside markets, the NYMEX crude oil market is $0.55 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 50 points higher.

Mike

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USDA SAYS:

In its report Friday, the USDA pegged the U.S. 2019 corn acreage at  91.7 million bushels vs. the avg. trade estimate of 86.7 million and the USDA’s 2018 June estimate of 92.8 million.

For soybeans, the USDA sees 2019 acreage at 80.0 million vs. the trade’s expectation of 84.4 million and the USDA’s 2018 June estimate of 89.2 million.

All Wheat acreage estimate is pegged at  45.6  million vs. the trade’s expectation of 45.67 million and the USDA’s June 2018 estimate of 45.8 million.

In its report, the USDA pegged the U.S. June 1 corn stocks at 5.202 billion bushels vs. the avg. trade estimate of 5.34 billion and the USDA’s year ago stocks estimate of 5.305 billion.

For soybeans, the USDA sees June 1 stocks at 1.790 billion bushels vs. the average trade estimate of 1.86 billion and the USDA’s 2018 estimate of 1.21 billion.

USDA pegged the U.S. wheat stocks, as of June 1, at 1.072 billion bushels vs. the avg. trade estimate of 1.10 billion and the USDA’s 2018 estimate of 1.099 billion.

TRADE REACTION

--Jack Scoville, PRICE Futures Group, says that USDA gave the markets another shocker, today.

“Everyone was looking for more beans and less corn and got exactly the opposite. That is why the big reaction, and it is perfectly understandable. A 25 cent range in corn in less than 3 minutes is something. No one understands the corn planted and harvested area, as USDA had not shown that type of progress in the weekly data. The stocks reports are kind of friendly, but the planted area report is the headline and most likely not in a good way for a lot of traders and brokers. These are wild numbers. I do have one farmer who has been telling me that a lot of corn got planted early in the month, but even so, these numbers are hard to believe,” Scoville says.

--Sal Gilbertie, Teucrium Trading, says that the USDA corn acreage estimate is telling.

“Farmers were clearly incentivized to plant corn in order to capture government benefits contingent getting something into the ground this season. Look for the July WASDE to reflect a slightly improved corn balance sheet and to tighten the soybean balance sheet perhaps more than was anticipated prior to today’s acreage report,” Gilbertie says.
Gilbert adds, “Wheat disappearance reflects the healthy rate of wheat exports we’ve seen so far this year.”

--Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that not a lot of people will believe today’s USDA corn acreage estimate.

“I don't think anyone saw this coming. I doubt there is much belief in the published numbers. Trade is telling us that as well. Touched limit down and now trading down 17-18,” O’Connell says. What a wild ride. At one point we were up 14-15¢.”
The confusion is occurring because USDA starts March with planting intentions of 92.4 million acres. After a wet spring, delayed planting, the USDA takes 3.0 million corn acres out of production in it's May WASDE, O’Connell says.
“That’s not a typical move, but none the less something that was very easy to rationalize and warrant. Today, USDA place planted acres at 91.7 mln acres. Effectively saying that we planted all of the acres that we originally had planned,” O’Connell says.
A further dive into the numbers on a state by state look, points to states that have struggled tremendously - Illinois, Michigan, Ohio, to be planting either the same amount of acres of more than last year, O’Connell says.
“It simply doesn't add up. This should be viewed as a buying opportunity on corn. Bean number could hold some water, with burdensome stocks continuing to loom over that market. Even with this 'bullish' news in beans they can only muster up a 10 cent rally.
Not ultra insightful, but honestly this report just seems bogus...and I typically don't bring much issue with USDA reports.“

--Jason Roose, U.S. Commodities, says that today's USDA Report continues to give shock waves in the grains.
“Last month the large drop in yield for corn, due to poor planting conditions, was considered friendly. The shock, today, with acres anticipated to be 4-5 mln acre drop in corn was only 1.1 million. But, the soybean acre number was lowered by 4.6 mln acres, with these numbers being shifted by the USDA. The large stocks on beans could be jeopardized. Weather will be watched closer now than most markets we have seen in modern times.”

What say you?

Thanks,

Mike

[samalan1140]

No way in hell were ther 91 million acres of corn planted no way.

[marketeye]

It's interesting to note that the total U.S. corn and soybean acreage equals 171.7 million vs. last year's 178.6 million and  a farmer survey amount of 170.0 million by one of my market contacts.

So, there will probably be some massaging of this number all summer.

Mike

[rrfarms24]

Laughable is all that is...No way that’s even close to right but give it time they’ll get caught with they’re pants down I can drive 50 miles in any direction from my house and most corn isn’t planted and what is planted is 3 inches tall a week from the 4th 

[samalan1140]

They obvisouly want to keep the corn prices from going higher so they came out with this crap number so they can revise it a little at a time.

[gurly3801539]

I have no way of proving USDA wrong nor would anyone give credit to what I say but it looks like another announcement for the hedge funds.

[illinifarmer]

Wow , how are these guys not in jail?  No one expects any report from this outfit to  be accurate however this has to be borderline criminal.  All of us have seen the fields as well as conditions; 91 wow 😲.

[mzeiler72709]

.We are witnessing socialism in action, manipulate the markets, break the farmer, then supply dwindles to a rationing situation then you raise food costs to unaffordable levels to the consumer, now you have a hungry broke population you can control, the Trumps, Clinton’s, Schumer’s and Pelosi’s of the world have enough money and power to be immune from this but most will go hungry! History repeats itself eventually.....

[sw363535]

Mike think about this-----

Usda is going to resurvey 14 states......  I got the first survey (totally loaded to support normal projections,  way after the flooding was underway)  It came to my address three weeks to a month before corn could be planted.  South Texas reported its first planting after the survey return date. -- The survey instructs producers who have not finished planting yet to, as it always has, to "enter your normal planting intentions."  ---- It has never been a survey to see what is actually planted, but is only a survey to assess maximum intentions.

If the wording and instructions are not changed........ results will not change...because not planted will be changed to intended planting.   The only incentive for resurveying is to deflect complaints.  There will be no attempt to actually count anything...... it would bring responsibility to bear.

Now that crop inputs and seed are handled by so few, why do you continue to repeat such a terrible source of information.

If a survey of 5 seed companies was run to record the change in sales in the midwest this season, I would be much more confident in the results.

Media will believe the usda number even when the justification of its doubt is across every state.  Same thing happened in 2012 until we had to barge corn north from texas in early september to keep ethanol running.  Yet the drought was gripping us for 15 months ahead of that event.

It is pretty obvious that "harvested" acres for corn in '19, will be somewhere far south of 85m acres -- closer to -80m unless we have a very late fall and millions of green chop acres become grain acres, but those small yields arent going to replace the lost.   The market did chase some soybean acres to corn as the corn market has shown much better improvement by the potential for production problems (rising from $3.35- $4.80 out here in feedlot country)  No sense in covering that story or interviewing one of the worlds largest feeders--- they are not hard to find.

That is not as easy as typing the floor talk by lines for Mr K....... 

Try to get mr k to explain why the CBT started jumping today 45 minutes before the report was released.  That would be a good story and cme should be able to help with that, they are probably trying to look into it.

I wrote what I did not to sound extreme..... I really think the harvested corn could be closer to 75m.  But we will never print the facts at usda,  only the projection... which is under control.   Beans harvest will be close to 78-80m at very best and all will be planted very late.  I saw beans still emerging in sw ks yesterday.   Planters still running......desperation time.

In sw ks corn and beans and wheat were hailed into the ground across two counties where every 6k of acres takes 1.3 million bushels away from corn harvest.  There were 3 or 4 of those events that night across the country... not counting the 7-9 inches of rain in se Minnesota.   At least southwest of Dodge city the planters could run behind the storm (lot of acres in that area have been planted to corn three times, late plant, flooded plant, and now hail plant on June 27th.  usda will instruct them to count every acre planted each time.  The survey is not written by folks who understand the process but do know how to present leading questions.

[roarintiger1]

I really don't understand the USDA's reasoning in putting out this report and stating that they are going to re-survey 14 states.  They obviously know today's numbers are not close to the end result.  With all the planting problems in many locations, why not delay this report to get the numbers closer to reality?   

I do agree with most everything from the responses on this thread.

My two cents is this......They lowered their bean acreage by 9.2 million acres.......that's 450 million bushels of production!

Soybeans should've been limit up today.