August 8th, 2013
Drew Johnson
Grain Originator

We are finally seeing a bump in the market today after days of trading lower. Traders are starting to look at Monday’s USDA Report and are trying to square up positions.

Corn as of 8:00 am Sep. 4 higher    Dec. 3 higher

Trade is expecting total corn production at 14+ billion bushels with a 157.7 yield. Those numbers suggest a 2 billion bushel carryout and, to analysts, would put price a lot lower than values are today for harvest time. Farmer selling has slowed. Weekly ethanol production was up to 853,000 barrels versus 832,000 last week. Export numbers this morning see old crop corn exports at 290,000 vs. 174,000 last year. New crops sales at 221,000 vs 105,000 this time last year. Weather forecasts remain cool and wet long term. Traders will be contemplating acres and yield. Here  are some numbers that show how the corn acres progressed or declined in slow plant years.

As we can see the majority of these years USDA has readjusted as we get closer to fall. Technically speaking the Sep contract is holding its own at $4.70 futures while the Dec contract is finding support at $4.60

Soybeans as of 8:00 am Nov. 10 higher

Average trade guess has total production at 3.336 billion bushels and yield projections at 43.6. These numbers are still below the USDA’s July predictions. Export numbers this morning have old crop sale at 79,400 vs. 105,000 last year. This still exceeds the USDA predicted 46,000. New crop sales 1.02 mmt vs. 195,000 last year. As we see in the charts below, most of the time in ‘’Big Crop Years’’ we see the USDA adjusting the yield potential from August. Most years it has improved by January. The next chart shows acre adjustment. Not much change throughout the year. Technically speaking we see support at $11.50.

 

Wheat as of 8:00 am Spr. Wheat 2 higher    Win. Wheat 3 higher

Wheat follows corn. USDA will reestimate US wheat production in Monday’s report. Guesses are all wheat production at 2106 versus 2114 in the USDA’s July report. Wheat exports this morning are at 726,000 vs 665,000 last year.