May 16, 2016
Grain Marketing Specialist
Export inspections to be released this morning and planting progress this afternoon.
CORN (Down 2)
Both July and December futures closed up 13 cents on the week last week as the trade continues to digest the USDA numbers we were given last Tuesday. Currently the numbers are 93.6 mln acres of corn, 168 bpa and a 2.1 bln bushel carryout. Will we see an acreage reduction in the June 30th stocks report? If so, we could see carryout drop on corn and increase in beans if weather conditions remain neutral. The bottom line is I think we can assume one thing; we are in for a volatile market heading into the summer months. The trade is looking for corn to show 70-75% planted in this afternoon’s report which is on par with the five-year average. Nearby support for July futures is found on the 10 day moving average of $3.80 with resistance at $3.95. Below is a look at the corn/ratio as it stands today….
SOYBEANS (Down 2)
Beans took the biggest jump for the week, climbing 30 cents on the July and 32 cents for November futures. The USDA didn’t disappoint last week as they tightened up 16/17 bean carryout by an astonishing 100 mln bushels over the average trade guess. The numbers from the report are 82.2 mln acres planted of beans, 46.7 yield and a 305 mln bushel carryout. The trade will be watching the planting progress report closely this afternoon to see if corn planting has been delayed in the East where acres shifts seem to still be a possibility. You may ask, what does an acreage shift mean at this point? If we flip 2 mln acres from corn to beans using the USDA yields, we increase bean supply by 94 mln bushels and decrease corn supply by 335 mln bushels.
WHEAT (Minneapolis down 1, Kansas City down 1)
Wheat stocks remain large and carryout was shown on the high side of expectations on Tuesday just over 1 bln bushels. Minneapolis and Kansas City markets were virtually unchanged for the week as we are still 25 cents off the highs set a few weeks ago. Any bullish sentiment to the market seems to be quickly forgotten when we keep staring at an over 50% stocks to use ratio for this coming year. Wheat conditions have looked good thus far as the trade is expecting another positive wheat rating in this afternoon’s report.