In their June World Agriculture Supply and Demand Estimates report, USDA slashed corn output, but left soybeans unchanged.
In the WASDE report narrative, USDA economists wrote: “Unprecedented planting delays observed through early June are expected to prevent some plantings and reduce yield prospects. USDA will release its Acreage report on June 28, which will provide survey-based indications of planted and harvested area.”
While analysts were looking for a yield reduction, nobody expected the agency to reduce yield to 166 bu. per acre. According to a Reuters survey, the trade expected a 172.4 bu. yield for corn.
Here are the trade expectations for today's USDA reports. Analysts are looking for a healthy cut to U.S. #corn production based on delayed planting and excessive moisture. A smaller cut is expected for #soybeans and #wheat. Big range on new-crop U.S. corn ending stocks. pic.twitter.com/492hPcAIoE— Karen Braun (@kannbwx) June 11, 2019
Additionally, USDA removed 3 million harvested acres from the balance sheet. A move INTL FCSTone chief economist Arlan Suderman says indicates more cuts are coming.
Sharply lower supplies pushed use down 425 million bushels to 14.3 billion, based on reductions to feed and residual use and exports. Carryout is expected to decline 810 million bushels to 1.7 billion, which if realized would be the lowest since 2013/14.
Corn markets surged higher following the report’s release, including nearby contracts indicating the weather market is far from over.
Despite reporting just 60% of the soybean crop is planted in their June 10 Crop Progress Report, USDA left soybean output alone in the June WASDE report.
Agency economists wrote: “Although adverse weather has significantly slowed soybean planting progress this year, area and production forecasts are unchanged with several weeks remaining in the planting season.”
With soybean use unchanged, 2019/20 ending stocks are projected at 1,045 million bushels, down 25 million from the revised 2018/19 projection.