Two major reports were out from USDA on June 30, the Acreage report and Quarterly Stocks report.
The news is bearish for both corn and beans. The report showed 84.8 million acres devoted to soybeans, significantly higher than trade expectations. Corn acres were at 91.6 million acres. According to Reuters the average trade guess had soybeans at 82.2 million acres and corn at 91.7 million acres. The market reaction was instantaneous, old crop soybean prices fell as much as 70 cents, the most it can move is a dollar. Corn was down 20 in some futures, the most it can move is 35 cents.
Market Analyst Don Roose President of U.S. Commodities says the reports were game changers to the negative side, "Really what we had was those phantom loss acres, that were not in the March report, showed up on this report on soybeans. You look at the corn, it was also a negative report when you look in the acres, they really didn't change a whole lot from the estimate that we had in March. But when you look at the carryover that we're going to have this year coupled with large enough acres in a yield there’s a potential for a 2 billion carryout and that's in the face of increased feedstocks around the world."
Market Analyst Mike Seery with Seery Futures says the outlook is bearish for corn, "In my opinion, we will be breaking $4 here in the next 3 weeks or so. There's too big of a supply. I just don't see anything stopping this, and corn only has about three more weeks of growing season and that's it. If you don't have a drought in the next 3 weeks, this crop is made."
Seery says the soybean increase changed carryover predictions, "Soybeans are still early in the growing season. We were expecting a 3.6 billion bushel crop, and that was based off of 81.5 million acres. So we've now added 3 million more acres, and now we're looking at a 3.7 billion bushel crop."