May corn futures dropped their daily 40-cent limit this morning, after USDA shocked the market once again with a March 1 grain stocks number that showed much bigger supplies than expected.
At 5.399 billion bushels, inventories are down 10% from a year ago. The government's estimate was above even the forecast from Farm Futures survey, the largest pre-report estimate in the market, and almost 400 million bushels above the average trade guess.
The data suggests lower than expected corn feeding during the second quarter of the marketing year and perhaps greater 2012 crop production as well. Wheat stocks of 1.234 billion were also greater than expectations, implying less wheat was also fed than traders anticipated.
Soybean stocks at 999 million bushels completed the bearish trio of stocks reports. It's hard to know just what the bean figure means, because it implies negative residual usage during the Dec-Feb quarter, perhaps implying the 2012 crop was bigger than expected.
Soybeans followed corn lower on the report results, with selling in wheat also picking up steam in the wake of the reports, which largely overshadowed the agency's first survey of 2013 planting intentions.
The corn estimate of 97.28 million acres was in line with trade guesses and would be the most since 1936. USDA put soybean acres at 77.1 million, down from 2012 and well below trade guesses. It appears farmers on the northern plains decided to plant more spring wheat than soybeans, and a shift back to cotton in the South may also be a factor.
Corn growers in the eastern Midwest as expected cut back corn seedings, with acreage down in Michigan, Illinois and Indiana. Farmers in Illinois and Iowa planted more soybeans, but Indiana growers plan to plant less beans as well after boosting winter wheat seedings.