On Tuesday, USDA will release its June World Agriculture Supply Demand Estimates report. While Pro Farmer Editor Brian Grete doesn’t expect much movement for U.S. old-crop or new-crop ending stocks, he does expect USDA to lower its global carryover numbers for corn and soybeans.
“I don't think there'll be a whole lot of movement on the carry over or ending stocks estimates for either old crop or new crop for the U.S. side of things,” Grete told AgriTalk host Chip Flory on Monday. “Probably the bigger focal point is going to be the global, and specifically South American, estimates and how much those are reduced. I think USDA still has some room to lower its Argentina estimates for both corn and soybeans and the Brazilian corn crop estimate.”
Grete says that “lends us to believe” that global carryover for corn and soybeans will come down.
According to Flory, in recent years the market is seeing more price movement based on global numbers than domestic numbers. In some cases, that’s how it should be, Grete says.
“Well, in the case of corn, they should [pay attention to global numbers.] I mean, look at the huge year over year declines that we're projected to see for 2018-2019. And that comes after a significant reduction for 2017-2018, the current marketing year,” he explained. “So, the trade should be paying attention to that because, you know, the estimates now are down really significantly for 2018-2019 for the ending stocks so that is that should be a focal point in these reports, in my opinion.”
Despite strong looking corn and soybean crops throughout the country, Grete does not expect USDA to change it yield forecasts in this report. In fact, he told Flory the odds are “slim to none” that USDA adjusts their 174 bu. per acre trend line on corn, or the 48.5 bu. per acre trendline on soybeans.
“I would be in the camp that I don't anticipate USDA doing anything with the yields this month. Historically they have a couple times made adjustments but that has mostly been based off planting pace and the planting pace is no more than the normal at this point in time – and it got off to a slow start,” he explained. “I don't think there's justification [to adjust trendline yield] despite the strong ratings.”
Tomorrow’s WASDE report will be released at 11 CST. As usual find you can find both the full reports and lots of analysis on AgWeb.com.