USDA to Re-Survey Six States: released Thursday afternoon...in an effort to get a better idea of both planted and harvested acres USDA will resurvey producers in those key flooded acres areas the week of June 23. USDA noted most of their initial surveys for the June 30 Acreage report were made before the flooding began. This will likely keep their June 30 numbers a little on the bullish side. We may not have to wait for months before the true planted and harvested numbers come out. Keep in mind they still plan to do a more extensive survey of the entire Corn Belt starting the week of July 12. The results of that survey will be included in the normal monthly supply/demand report released August 12.
Timing: with the above announcement could USDA be suggesting a time line of potential policy change measures to help control food price inflation within the US. USDA has at its disposal the following to help control the rise in corn, wheat, and soybean prices, A) announcing the release of CRP acres for winter wheat planting this fall, B) cap US ethanol production to keep end stocks of corn above a minimum of 500-550 million bushels, if need be the initial level reduced to maintain the 500-550 end stocks and then continue to lower ethanol production if crop size continues to erode in subsequent crop production reports, C) reduce for a short period of time the 54 cent per gallon import tax on Brazil sugar cane based ethanol, D) let futures rise and let cash price dictate the weakest end users of the three main groups of feed use, exports, and ethanol. There remains an outside chance the US government could phase in as quickly as possible a CFTC plan to curb the alleged speculation in crude oil futures and implement a similar plan for grain and oilseed commodity futures. Allendale suggest USDA and the US government has a number of choices above but most likely may piece meal out announcements to tame futures and cash prices, rather than shock futures lower with one single announcement. USDA has held a tendency to not intervene within world exports and allow price to dictate what world demand can best afford US grains and allow world demand to deal with its individual transportation cost. (IE buying supplies and or alternative supplies as close to home bases as economically as possible).
Weather: The center stage has been weather and that may likely remain the case through August. Forecast suggest warmer, less heavy frequent rains for much of the week of June 23 and the week of June 30. Friday's six to ten day forecast normal temps and mostly normal precip with the exception of above normal precip for southwest South Dakota. Short range forecast suggest heaviest rain accumulation for northwest NE, west central IA and southeast South Dakota. According to the Crop Moisture index western IA and northeast NE, are at present wet, just one index away from excessively wet.
Corn Fundamentals: bullish to corn futures is any forecast suggesting a return to widespread heavy rains for the central Midwest, continued strike in Argentina, known as the #2 world exporter of corn and #3 world exporter of soybeans. Bullish to corn is projected US old crop corn stocks of 1.433 billion bushels (11.1% end stocks to use) shrinking to new crop levels of 673 million (5.4% end stocks to use) which is dangerously close to the record level low of 5% end stocks to use of 1995. Bearish to corn futures is a forecast calling for average weather conditions, any of the potential policy changes detailed above and the noticeable buying of feedwheat as a corn feed alternative.