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July Corn Futures

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July Wheat Futures

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July Soybean Futures

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July Wheat Futures

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July Soybean Futures

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July Wheat Futures

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July Soybean Futures

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July Wheat Futures

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May Soybean Futures

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July Wheat Futures

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May Soybean Futures

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July Wheat Futures

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May Soybean Futures

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July Wheat Futures

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COMMENTS – The trade was obviously leaning the wrong way headed into Thursday’s report. With the collapse in prices, it appears most expected a tighter stocks number suggesting a larger feed demand adjustment in future reports. Since the report indicated March 1 corn stocks some 339 mb above trade estimates, a very large surprise and outside the high range, expect lower feed demand adjustments in future supply/demand reports. Taken at face value, US ending stocks on August 31, 2013 appear headed toward 850 mb with a lowering of feed and export demand. Should US producers plant over 97 million acres, it would take only 147 bpa national trend to balloon US ending stocks to 1.8 mb at the end of August 2014 significantly higher than recent years. What happens if we recover to trend above 160 bpa and US ending stocks this year continue to increase? Many will dispute the stocks number, but remember corn harvest started early last year with some production used in last years supply/demand, skewing the feed usage interpretation from the Dec 1 stocks report. This report puts the feed demand number in better perspective suggesting lower feed demand in the 1st and 2nd quarter than was reported earlier for the 1st quarter and anticipated for the 2nd quarter. It will now take a weather scare and/or stronger cash basis levels to alter the negative effects from this report.

SOYBEAN
HIGHLIGHTS – USDA reported March 1 bean stocks at 1.0 again significantly above the trade estimate of 935 mb. Acreage intentions for beans were estimated for the 2013 productions year at 77.1 ma compared to trade expectations of 78.4 ma. Last year, producers planted 77.2 ma.

COMMENTS – Remember when many were surprised by the final yield numbers in the January report. Based upon many comments from producers, the expectation was final bean yields would inch higher some time. It appears the crop was underestimated then and the higher stocks number can only be rationalized this way given the strong export demand the US continues to experience from China. With an additional 65 mb to work with (more than what was expected), this will take some pressure off of final ending stocks for 2013. The acreage report suggests 77.1 ma. Would not be surprised to see final bean acreage move toward 79 ma given the sharp reaction to this report in corn and bean values and the February 2013 revenue guarantees provided by crop insurance. Flat price upward pressure has been reduced, and expect spreads and basis to do most of the work in making the transition from Northern Hemisphere demand to Southern Hemisphere demand.

WHEAT
HIGHLIGHTS – USDA reported March 1 wheat stocks at 1.23 again significantly above the trade estimate of 1.20 mb.

COMMENTS – The wheat stocks number made it 3 for 3 in higher than expected stocks number. Since all 3 stocks reports were bearish, this just added to the price fall experienced after the report release. Again people are going to interpret the higher wheat stocks with lower feed demand. There is ample world supply of wheat taking the edge off of feed commodity values and substitutes.

***The comments should be construed as market commentary relating to the release of the USDA report and not any particular trading strategy. Not responsible for third party distribution.

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May Soybean Futures

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July Wheat Futures

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