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Acreage Report · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_01: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_01: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_01: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_01: This is your host, Mike Minor.
• 0:22
  SPEAKER_01: Let's get started.
• 0:23
  SPEAKER_01: Today is June 30th, and I've got Nick Bork with us today.
• 0:27
  SPEAKER_01: How's it going, Nick?
• 0:28
  SPEAKER_00: It's going well, Mike.
• 0:29
  SPEAKER_01: Good, good.
• 0:30
  SPEAKER_01: Well, we're gonna talk about a couple things today.
• 0:32
  SPEAKER_01: It's a report day.
• 0:34
  SPEAKER_01: Uh, gonna talk about acreage and quarterly stocks, but what are the grain markets doing right now?
• 0:39
  SPEAKER_00: Yeah, we do got quite the spread action going on right now in corn and beans.
• 0:44
  SPEAKER_00: Uh, corn is down about 30 right now, and beans are up about 80.
• 0:50
  SPEAKER_00: So what did that big report show us here today, Mike?
• 0:53
  SPEAKER_00: Oofta.
• 0:54
  SPEAKER_01: Well, the report was focused on uh a couple main categories.
• 0:58
  SPEAKER_01: So the first one was the quarterly stocks report.
• 1:01
  SPEAKER_01: So uh stocks were generally supportive for um corn, wheat, kind of more neutral on the soybean side.
• 1:09
  SPEAKER_01: So they did find a little bit less corn uh out in the country on stocks, uh, and then uh found pretty much what they expected on the soybeans.
• 1:17
  SPEAKER_01: But I would say the um the old crop and uh old crop stocks on uh corn were probably the big talking point.
• 1:25
  SPEAKER_01: They came in at about 4.1 uh compared to like 4.2 as an average estimate.
• 1:31
  SPEAKER_01: So down a little bit from last year's numbers, down a little bit from the average trade guess.
• 1:37
  SPEAKER_01: So we are gonna carry in a little bit less uh corn going into this new crop year uh than what we had expected, Nick.
• 1:44
  SPEAKER_01: But I would say that probably wasn't the uh real mover in the shaker today, was it?
• 1:49
  SPEAKER_00: Yeah, what was the big takeaway from from the reports here?
• 1:53
  SPEAKER_01: The big takeaway here was the acreage data for sure.
• 1:55
  SPEAKER_01: It was really bullish on the soybean market, uh pretty bearish on the corn market to say the least, and pretty mixed for wheat.
• 2:02
  SPEAKER_01: So not a whole lot in the wheat market getting talked about after this report compared to the corn and soybeans, but corn planting came in at 94.1 million acres, Nick.
• 2:12
  SPEAKER_01: That was up 2.1 million bush or 2.1 million acres from the March intentions, and uh about 1.5 million acres above that range of estimates.
• 2:23
  SPEAKER_01: So a really big uh really big move on the corn side.
• 2:27
  SPEAKER_01: And then on the soybeans, uh obviously uh giving corn a few more acres, that pretty much directly took away from the soybean side.
• 2:35
  SPEAKER_01: Uh we came in at 83.5 million acres on the soybeans, which uh was well below the uh well below the four million four million uh acres lower than the March intentions actually.
• 2:48
  SPEAKER_01: So uh a pretty big difference there, and uh four million acres lower than the average trade guess too.
• 2:54
  SPEAKER_00: So really yeah, that's incredible.
• 2:57
  SPEAKER_00: So how do the how does this acreage change uh in this report kind of compare to you know some of the bigger changes we've had in past reports?
• 3:08
  SPEAKER_00: I mean, does this even compare to Yeah?
• 3:11
  SPEAKER_01: So when you start looking back at um the acre changes we've had from March to June and prior reports, I mean, since 1990, this would have been the second largest increase in acres on corn from March to June.
• 3:25
  SPEAKER_01: Uh that would have been behind uh in 2007, you had 2.4 million acres uh increase in that marketing year, so uh between that time frame.
• 3:35
  SPEAKER_01: And um, you know, when I look at the soybean one, that was the second largest decrease since 1990.
• 3:41
  SPEAKER_01: Um back in 2019 it was a little bit wet, someone told me.
• 3:46
  SPEAKER_01: So we declined about 4.6 million acres uh that year there.
• 3:52
  SPEAKER_00: Sure, sure.
• 3:53
  SPEAKER_00: Uh what so what states did they adjust uh or primarily got adjusted for acreage then?
• 4:01
  SPEAKER_01: On the corn side, um it was a little bit more weighted.
• 4:04
  SPEAKER_01: The Illinois uh acres were increased quite a bit on corn, uh, Texas acres were increased, uh, Iowa and South Dakota were both increased pretty largely, Missouri a little bit, North Dakota too, uh, but North Dakota was the smallest of those.
• 4:20
  SPEAKER_01: And on the soybeans, you know, uh kind of counteractive of that, the biggest decreases were North Dakota was a biggest decrease.
• 4:29
  SPEAKER_01: Uh that was down 900K on its own.
• 4:31
  SPEAKER_01: And then uh Illinois, and uh Iowa, those are both down majorly, down 800K, and then Missouri, Kansas, Nebraska, those were all down a little bit as well.
• 4:43
  SPEAKER_00: Sure.
• 4:44
  SPEAKER_00: Sure.
• 4:45
  SPEAKER_00: So how, yeah, with with that kind of acreage adjustment now and the and the yields that we got that we're that are kind of projected from USDA too, how do these balance sheets look now?
• 4:58
  SPEAKER_01: So on the corn side, it's gonna look really ugly.
• 5:01
  SPEAKER_01: I mean, when you just plug in 94 million acres on corn and and uh you leave yield where they had it back in uh in June, obviously it's a huge, huge number.
• 5:12
  SPEAKER_01: Um so let's just uh do a little magic here, and let's say you drag the yield down to 174, uh down seven bushel off of trend line, just to give us an example here.
• 5:25
  SPEAKER_01: With those kind of acres, you're still looking at 15 billion bushels of production, which uh that'd leave supplies extremely comfortable still.
• 5:33
  SPEAKER_01: So when we start talking about that, it's painting a pretty ugly picture on the corn market and uh definitely gonna be a weight on these prices going forward, even with uh you know, let's say you get a weather rally or something, those acres are really gonna hold over this market.
• 5:50
  SPEAKER_01: And uh we're gonna have to get down to a price level then that we probably start to stimulate demand a little bit.
• 5:56
  SPEAKER_01: Well, now you really got to look at corn is still twenty to thirty dollars above Brazil uh for export prices, you know, from now until September.
• 6:05
  SPEAKER_01: So it's gonna continue to be uh a little bit aggressive there um on trying to ration any demand, I think, going forward with what we currently have for competition.
• 6:16
  SPEAKER_00: Sure.
• 6:17
  SPEAKER_01: And then on the soybean, I mean, we could talk about that one a little bit too.
• 6:21
  SPEAKER_01: Uh I would say that um if you leave yield at fifty-two, with where the USTA had it, with their new 83.5 million acres, I mean you're looking at 140 million bushels of uh ending stocks, which would be 3.2% stocks to use ratio.
• 6:40
  SPEAKER_01: You're pretty much back to pipeline levels at that point.
• 6:43
  SPEAKER_01: Uh so clearly there's not a ton of wiggle room now in the soybean balance sheet for reduced yields.
• 6:49
  SPEAKER_01: Um you know, we'd uh we'd have to ration pretty hard if we did start to uh decrease that yield at all on the soybean side of things.
• 6:57
  SPEAKER_01: So uh give support to the soybean market here a little bit today on co on soybeans, and then the corn obviously is is struggling a little bit today.
• 7:07
  SPEAKER_00: Yeah, boy, it's been a while since we've had this big of a report or this this kind of report that's moving and shaking things up a bit as much as it is.
• 7:17
  SPEAKER_00: But thanks a lot, Mike.
• 7:18
  SPEAKER_01: Alright.
• 7:18
  SPEAKER_01: Thank you so much, Nick.
• 7:20
  SPEAKER_01: And thank you to all our listeners.
• 7:21
  SPEAKER_01: Please reach out to us at professionaleggmarketing.com.
• 7:25
  SPEAKER_01: Check out our other podcast as well, Professional Ag Marketing, that's released every Friday.
• 7:30
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 7:36
  SPEAKER_01: See you next time.