 "Taken together, the USDA reports were negative for corn
prices," said Darrel Good, U of I Extension Economist. "With a
slowdown in corn use already happening, year-end stocks will
likely be at least 100 million bushels larger than the 1.433
billion bushels projected by USDA earlier in the month."In
addition, the acreage estimate suggests less rationing will be
needed next year, although stock levels will still likely
decline during the 2008-09 marketing year," he said.
For soybeans, production may fall short of the 3.1 billion
bushels projected earlier in the year by USDA, keeping stocks
extremely tight for another year.
"For the next two months, prices will be all about U.S.
weather," Good said.
June 1 stocks of U.S. corn were estimated at 4.028 billion
bushels, nearly 500 million larger than stocks of a year ago and
about 100 million larger than the average trade guess. After a
13 percent increase in feed and residual use of corn during the
first half of the year -- perhaps reflecting an overestimate of
the size of the 2007 crop -- use during the third quarter of the
marketing year was about equal to that of a year ago.
"Corn use during the summer quarter will be impacted by the
rate of liquidation of animal numbers, which has been extremely
modest to date, and the rate of wheat feeding, which should be
substantial. Use for the year may fall short of the USDA
projection of 6.15 billion bushels," Good said.
June 1 stocks of soybeans were estimated at 676 million
bushels, 416 million less than stocks of a year ago, but only a
few bushels larger than the average trade guess. After
negligible feed and residual use of soybeans in the first half
of the year -- perhaps reflecting an underestimate of the size
of the 2007 crop -- use was near normal in the third quarter of
the year.
Wheat stocks on June 1, the beginning of the 2008-09
marketing year, were estimated at 305.6 million bushels, about
150 million less than stocks of a year ago, but about 20 million
above the average trade guess and about 50 million larger than
the USDA projection earlier in the month.
The USDA indicated that it re-interviewed about 1,200 farmers
on June 23, 24 and 25 to supplement the data collected in the
normal survey procedure for the June Acreage report.
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"The results indicate that producers planted or intended to plant
87.327 million acres of corn for all purposes this year. That is
about 1.3 million acres above intentions reported in March and 2
million acres above the average trade guess," Good said.
Corn acreage intended for harvest as grain is projected at 78.94
million, 7.6 million less than harvested in 2007. The difference
between acreage planted and harvested for grain is estimated at
8.387 million, about 1.2 million more than normal.
"Widespread flooding is expected to result in more abandoned
acres or perhaps more acres harvested for silage. Yield potential is
difficult to predict, but based on improving weather, a benign
weather forecast for July and improving crop condition ratings,
potential yield is likely at or above the USDA's June assessment of
148.9 bushels. The 2008 production potential may be between 11.8 and
12.0 billion bushels," Good said.
The USDA's said acreage planted, or intended to be planted, to
soybeans is 74.533 million acres. That is 10.9 million more than
planted in 2007, 260,000 less than indicated in March and 330,000
more than the average trade guess.
"At the time of the survey, however, producers indicated that 21
percent of the intended soybean acreage had not been planted, the
most since 1996," Good said.
Soybean acreage for harvest is projected at 72.121 million acres,
9.3 million more than harvested in 2007. The difference between
planted and harvested acreage of 2.4 million acres indicates that
about 1.4 million more acres will be abandoned than is typically the
case.
"Yield potential is still very uncertain due to the lateness of
planting in many areas. Favorable summer growing conditions that
extend well into September could result in the U.S. average yield
near the trend of 42 bushels, producing a crop of more than 3
billion bushels. In general, however, the trade is probably
skeptical that a trend yield in soybeans can be attained," Good
said.
[Text from file received
from the University
of Illinois College of Agricultural, Consumer and Environmental
Sciences]
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