Thursday’s June 30th Acreage Report from USDA is typically the first good look at the year’s planted crops, which makes it an important report. Mike Zuzolo of Global Commodity Analytics says moves by the Federal Reserve may limit the report’s impact.
“They are on a significant pathway to work very aggressively against commodity price rallies by raising interest rates to the point where it should keep the dollar stronger, which leads us more towards the potential for rallies to come more from weather and supply-related things. And so, that maybe is why I’m not as nervous or concerned about what the report says because this overarching issue in the outside markets, crude oil, and the dollar will remain the predominant demand drivers for the grains, in my opinion, through summer in terms of the demand side and weather will remain the major supply-side issue at this point in time.”
There’s speculation going into the report that agriculture may have bought back some corn acres from the March report.
“Yeah, I think that’s right because we did make some really strong headway in the Northern Plains. I found the expectations, the trade estimates, for spring wheat coming in at 10.84 million acres as an average trade guess on the Reuters News poll, very close to where I am at, right around 10.8 million, so I’m going to say that we lost maybe only 400,000 acres of spring wheat. We’ve got 400,000 acres, in my opinion, to play with, roughly, and when it comes to the spring wheat acres being down, I’m going to say around 100,000 of that are going to go to corn, and 300,000 are going to go to soybeans.”
He talks about acreage numbers we may see on Thursday.
“Back in March, my acreage base number for corn was 90.6. I’m going to say it’s probably going to be more like 89.6 versus USDA’s March number of 89.5. Back in March, my bean number was 91.0. USDA came in at essentially 91.0. I’m going to say that we could probably come in at about 91.25 in the soybean numbers. And so, my soybean number, especially, is quite a bit higher than the average trade guess. The average trade guess on soybeans is 90.45, and my corn numbers right with the average trade guess, pretty much.”