Corn and soybeans both closed higher on Friday due to short covering ahead of the Grain Stocks and Acreage reports on Monday morning. These are key reports every summer and historically cause large moves in the grain markets. Monday will also be the end of the month and the end of the quarter, adding another reason for increased volatility.

Corn

Acreage Report

The average estimate is 95.35 million acres (ma). Analyst estimates range from 93.750 ma and 96.80 ma. The March Prospective Plantings report showed an estimate of 95.326 ma. The USDA has raised June planted acreage estimates above the March intentions report in each of the last 4 years. The key piece of this report is how many acres have shifted from cotton to corn in the South and how many acres have shifted from soybeans to corn. The areas shifting to corn acres will very likely be lower-production areas. Planting pace has been strong this year, except for some overly wet eastern states, weather has been good enough. 

Grain Stocks Report

The average trade estimate is 4.641 billion bushels (bb). The Grain Stocks report is typically harder to estimate than the Acreage report. Analyst estimates fall between 4.473 bb on the low end and 4.798 on the high end. March stocks were estimated at 8.15 bb. Last year, the USDA estimated 4.997 bb in June. If the USDA comes in above 4.65 bb, corn could make new lows in a hurry with Brazil’s record crop on the way and non-threatening weather forecasted. With the large number of shorts, some think it’s possible. 

Soybeans

Acreage Report

Analysts are estimating soybean acres to come in between 82.5 ma and 85.4 ma. The average estimate for soybean acres is 83.655 ma. In March, the USDA’s planting intentions estimate was 83.495 ma. In the recent past, the USDA has had a tendency to release estimates below expectations. Regardless, the period from late June to early October has been a rough stretch for the soybean market over the last 14 years—11 out of the last 14 years saw losses during this time frame, with an average return of just under -5% or -22 ½ cents.

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Grain Stocks Report

The average analyst estimate is 980 million bushels (bu). Estimates fall between 950 mb and 1.130 bb. Last year, the USDA came in at 970 mb in on the June stocks report. Recent stocks reports have tended not to come in far from the estimates. 

Weather for July shows dry and higher-than-normal temperatures for the central plains in some forecasts. The eastern corn belt is expected to see improved conditions with hotter weather and some rain. Brazil has a bumper crop, expecting 123.3 mmt of second-crop corn, currently 55.3% complete. Brazil’s second crop corn will account for ~80% of its national production and will compete with U.S. corn exports. More trade deals look to be on the way, with China making a deal with the White House to export rare earth minerals to the U.S. 

Monday’s USDA reports will be followed by a shortened trading week, with markets closed on Friday for Independence Day.

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