USDA releases ‘relatively tame’ stocks, acres reports

KANSAS CITY, Mo. — A pair of crop reports fell primarily in line with trade expectations as the market turned its focus toward weather in the last quarter of the marketing year.

The quarterly stocks and planted acres reports were released by the U.S. Department of Agriculture June 30.

“The reports themselves are relatively tame,” said Arlan Suderman, StoneX chief commodities economist, in a webinar to review the data and expectations.

Starting with the quarterly grain stocks estimates that reflect on-farm and off-farm storage as of June 1, what were some of the highlights?

Suderman: The corn quarterly stocks number came in almost exactly what the trade expected at 4.644 billion bushels. The trade was at 4.641 billion. I had a lower number — 4.557 billion.

I think feed use is bigger, but USDA is saying, no, it’s not. So, keep that in mind for the September stocks report. Maybe we get a downward adjustment in feed usage.

Soybean quarterly stocks came in about 28 million bushels above the trade estimate —1.008 billion versus the pre-report trade guess of 980 million — and that means residual use of soybeans is lower.

Again, the 2024-2025 crop size is bigger than what was reported. I do think this stocks report means residual comes down to 105 million bushel.

Wheat coming in higher — 851 million bushels versus the trade’s 836 million — suggests that wheat feeding is lower than anticipated.

I think what it was is USDA’s had a tendency to understate the size of the wheat crops, and so we end up with more stocks and then we under-report wheat feeding to account for it. I think wheat feeding is there, but the crop is even bigger than what it keeps reporting year in, year out.

Did the quarterly stocks data show any other trends?

Suderman: It’s interesting to look at corn stored in all positions. For example, in Iowa, corn stored in all positions is 23 million bushels higher than a year ago.

Minnesota is down 79 million bushels from a year ago for corn stored in all positions. Now, when looking at what’s stored on-farm, Minnesota has 80 million less bushels of corn stored which accounts for the corn stored in all positions.

However, there’s a big difference in Iowa where overall corn stocks are 23 million higher, but corn on-farm corn is down 75 million bushels. So, the farmer in Iowa has been much more aggressive at selling than what he was year ago.

For soybeans, Iowa is up 8 million stored in all positions, while soybeans stored on-farm is down 10 million from last year.

It’s not a big difference because obviously we’re taking fewer soybeans, but the bottom line is the Iowa farmer has been aggressive in marketing this year.

What did the usage side of the quarterly stocks report tell us?

Suderman: Corn shipments continue to be above the seasonal pace needed to hit USDA’s target. The marketing-year-to-date inspections exceed the seasonal pace needed to hit USDA’s target by 138 million bushels and that gap continues to grow.

Ethanol crush margins are lower than they’ve been in recent years, but still strong enough to keep us going at solid levels.

We have seen a little bit of a pullback in ethanol production because some of the heat that we’ve seen of late, but heat is expected to moderate, which should allow some rebound in production.

Soybean demand continues to be flattening. South American soybeans continue to be cheaper due to the currency exchange rates.

Biofuel policy remains generally unknown.

Year-to-date overall feedstock consumption is down 18% compared to last year. Soybean oil consumption is down 27%, canola down 52%, yellow grease which also includes used cooking oil is down 23%. White grease is down 25%. Tallow usage is up 16%. Corn oil use is up 9%.

Soybean oil consumption is basically unchanged month over month. Canola consumption had another down month at 135 million bushels. Yellow grease or used cooking oil fell 9% month over month.

Total feedstock consumption fell 3%, totaling 2.6 billion pounds through April.

My soybean export number is lower than USDA by a considerable amount — 1.815 billion versus my 1.65 billion — because I think we’re going to see big supplies continue to come forward from Argentina and Brazil with flattening demand for China overall.

The first survey-based planted acres report found soybean and corn areas lower than the March 31 prospective plantings estimates and below pre-report trade guesses. What do you see ahead?

Suderman: USDA had soybean planted acreage 83.38 million — the third lowest in the last decade behind 2019 and 2020, both of which featured planting interruptions — down from 83.495 million March 31 and below trade of 83.655 million.

Corn planted acreage of 95.203 million is down from 95.326 million March 31 and below the 95.35 million trade estimate.

Prevent plant corn acres in southern Illinois, Indiana and Ohio may show up in the August report. The area that tends to get a lot of double cropping of soybeans behind wheat — that includes Missouri and the southern parts of Illinois, Indiana and Ohio — has had a delayed wheat harvest which may remove a lot of those soybeans from being planted.

This really wouldn’t be expected to really fully show up until the August reports. That’s something to keep an eye on, particularly as low as soybean acres is getting to be. That could be a bigger factor if we do get a weather scare.