Grain Outlook Corn market in for a bumpy ride

The following marketing analysis is for the week ending June 30.

CORN — The U.S. Department of Agriculture threw us a curveball to end the week and month with a very bearish acreage report! Up until then, it had already been an ugly week in the grains with a more favorable weather outlook.

Weather was the driver of price action before the reports with better prospects for rain into July which extended the decline started the week before. The losses came despite a 5 percent decline on the June 25 crop conditions to 50 percent good/excellent. Illinois and Minnesota were each down 10 percent, with Iowa down 3 percent, Wisconsin down 8 percent, Indiana down 9 percent, and Ohio up 5 percent. These are the worst conditions in 35 years for late June.

September corn ended the week with a streak of seven lower sessions and December was lower in six out of seven days. This week’s drought monitor as of June 27 showed an increase of 6 percent of U.S. corn area under drought to 70 percent.

The biggest corn shock on the USDA’s June 30 report was the 2.1 million acre increase from the March report to a huge 94.1 million acres — the third-highest corn acreage since 1941. The highest pre-report estimate was 93 million acres. Illinois corn acreage was up 500,000 acres from the March estimate and up 700,000 acres from last year. North Dakota acreage was up nearly 1 million acres vs. last year.

Corn stocks were 4.1 billion bushels compared to 4.255 billion bushels estimated. Fifty-four percent of the stocks were on-farm. This was the third biggest miss to the downside vs. expectations in 35 years. For the last four reports, corn stocks have been below trade estimates, but this year it seemed to be kicked aside.

The USDA announced this week the sale of 840,118 bushels of old crop corn and 5.9 million bushels of new crop to Mexico. Weekly export sales were 5.5 million bushels for old crop, bringing total commitments to 1.527 billion bushels. This is down 36 percent from last year when the USDA is predicting a 30 percent year-on-year decline. China has a minuscule 316,000 metric tons of unshipped purchases left vs. 3 million