Good Morning,

June went out like a LION and July has entered like one as well in the grain markets. This morning corn is up 7 and soybeans are up 9 at the time of this writing. Both are off of their highs by about 5 cents from earlier this AM.
Yesterday’s USDA report added some life to the markets when corn planted acres came in roughly 3 million acres below the average estimate and more than 4 million below the March report. Soybean acres came in roughly 1 million acres below the average estimate and slightly above the March report. Quarterly stocks came in 273 million bushels above estimates for corn and 6 million bushels below estimates in soybeans.
There are a lot of questions in yesterday’s report that will have to be answered in the coming months. The biggest question I have is where did more than 7 million acres go? In 2018 the US planted 319 million acres to all crops (corn, beans, wheat, sorghum, oats, barley, rye, peanuts, peas, etc.). In 2019 we planted 302 million acres(wet weather and a lot of prevent plant). This year we planted 311 million acres to all crops in what has been the best spring for planting the US has had in several years. When looking at the March intentions vs. the June revisions by state the following states jump out:

North Dakota down 1,400,000
Nebraska down 800,000
South Dakota down 800,000
Illinois down 500,000
Minnesota down 300,000

Of these numbers North Dakota is the only one that I can buy. They had wet weather all spring/summer long and struggled to get the crops in. The rest of the states unplanted numbers are too high in my opinion based on producers/buyers/traders that I have talked to from these states.
Yesterday’s report showed that corn stocks in all positions totaled 5.22 billion bushels on June 1, 1% higher than a year ago. On-farm stocks were 3% higher year over year at 3.03 billion bushels while off-farm stocks were 2% lower year over year at 2.20 billion bushels. The indicated disappearance of 2.73 billion bushels from March-May was 20% lower than the same period last year.
While the acres are a mystery, they have given the producer an opportunity to sell levels that less than 24 hours ago we didn’t think were obtainable. Producers should not lose sight of the fact that we are seeing the best prices since the Middle of March when the pandemic hit. Yesterday’s stocks report was bearish and weather will be the market mover for the coming weeks. Even if the USDA does not make an adjustment to acres later this summer/fall, 92 million acres is still the 5th largest planting we have ever had. Next week’s WASDE report is most likely going to give us a 2.7-3.0+ carryout for next year which is not conducive to prices moving higher. I think we are seeing some short covering and may continue to see that for a day or two, but long term these prices need to be taken advantage of. We are only a government move away from these markets crashing back to the lows seen in early May if/when states decide to shut-down again.
Reminder that the markets will close at noon tomorrow and not re-open until Sunday night.

Have a Safe Day!
Garry Gard