June Supply-Demand Summary

Corn: Changes to both old and new crop were minimal. 19-20 reserves were increased 5 to 2.103 billion; the trade average was 60 million higher. New crop ending stocks went up 5 from the May estimate to 3.323; the trade was expecting a 38 million increase. Old crop ethanol demand isn’t recovering quite as quickly as anticipated but the 50 mbu cut in that sector’s demand was mostly offset by a downward revision in last fall’s crop by 45 million. Call it a neutral report with the near-term weather picture somewhat supportive.

Soybeans: The trade was looking for a 2 mbu decrease in old crop carry-out to 578 bbu; the USDA went up 5 reflecting the net of a smaller export forecast and a slightly higher crush and a 5 mbu downward production revision. New crop ending stocks came in at 395; the trade average was 429. China imports were increased 2 MMT for 19-20 but unchanged for new crop. Versus the trade, slightly supportive old and new crop but the modestly negative Board action seems appropriate.

Wheat: U.S. winter wheat production was above the average trade estimate, while new-crop U.S. ending stocks were also above expectations. World ending stocks for 2020/21 were also projected at a record level. There continue to be mixed ideas, however, about U.S. winter wheat crop potential. Strong export competition is forecast to persist in 2020/2021, although there is also some uncertainty regarding crop size in the EU, Russia and Ukraine. Weaker, although the market will closely monitor U.S. winter wheat yields and competitor crop conditions.