Market Analysis

After last month’s initial US and World new-crop supply/ demand from the USDA for the major row crops, the up-coming June 9 monthly balance sheet adjustments have been modest in the past. Adding to the government’s stay the course approach are the USDA’s upcoming June 30 acreage and third-quarter grain stocks reports. These two reports are highly important to the size of 2017 crops and helps determine the past quarter’s feed demand across the US grain crops.

Given these past tendencies, the upcoming US corn balance sheet will likely follow this pattern. Despite this year’s export sales and ethanol corn utilization being a few tenth of percent ahead of seasonal paces, the USDA isn’t likely to make changes in these demands as they wait to see corn’s June 30 quarterly stocks to adjust their feed demand outlook. Despite questions about corn plant-ings, the USDA will likely postponed any 2017 changes until the US acreage report is known. No changes in 2017/18’s demand levels are likely this month either.

In wheat, this crop’s old-crop balance sheet isn’t likely to changes as demand levels appear on point. However, this year’s 2nd US winter wheat crop update will impact this grain’s 2017/18 balance sheet. Given recent declines in S. Plains wheat ratings, this month’s HRW output may de-cline by 16 million to 737 million bu. while this year’s SRW crop might also slip by 4 million bu. because of slightly lower yields. This smaller crop could reduce 2017/18’s stocks by a similar amount, but more harvest results than the current 10% are needed to make bigger changes.

With current export sales 97 million above soybeans 2016/17 outlook, this old-crop demand should rise by 25 million this month. However, this quarter’s crush has slipped by 15 million behind 2016’s pace suggesting old-crop’s stocks might dip by 10 million. Follow-thru may slip new-crop stocks by 10 million, but no big change likely.