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Floor Talk February 8 (Report Day)

[ Edited ]

USDA SAYS:

 

 

U.S. 2017/18 Ending Stocks:

 

Corn=2.352 billion bushels vs. the average estimate of 2.45 billion bushels and the government’s previous estimate of 2.47 billion.

 

 

Soybeans= 530 million bushels vs. the average trade estimate of 496 million bushels and the USDA’s January estimate of 470 million bushels.

 

Wheat= 1.009 billion bushels vs. the average trade estimate of 989 million bushels and the USDA’s previous estimate of 989 million.

 

World Crop Production


In its report, the USDA pegged the 2017/18 Brazilian corn production at 95.0 million metric tons, compared with the average trade estimate of 92.7 million metric tons and the USDA’s January estimate of 95.0 million mt.

 

For Brazil’s soybean production, the USDA sees 2017/18 output at 112.0 mmt.  vs. the average trade estimate of 111.6 million metric tons and the USDA’s previous estimate of 110.0 mmt.

 

USDA pegged Argentina’s 2017/18 corn production at 39.0 million metric tons vs. the average trade estimate of 40.4 met. and the USDA’s January estimate of 42.0 mmt.

 

For Argentina’s 2017/18 soybean output, the USDA sees it coming in at  54.0 mmt. vs. the average trade estimate of 53.6 mmt. and the USDA’s previous estimate of 56.0 mmt.

 

 

What say you?

 

TRADE REACTION

 

--Peter J. Meyer, Senior Director PIRA Agriculture, says that there are two notes of interest.
“In soybeans, the USDA continues to play a zero sum game by offsetting inner-country production losses in South America while shifting export demand from the U.S. to Brazil.  A U.S. carryout above 500 million bushels should have surprised no one given the pace of exports.  Leaving the global balance sheet virtually unchanged at roughly 98M MT may be misguided at the exact time that U.S. farmers are making planting decisions.  An increase in Brazilian production of 2M MT is a step in the right direction, but let’s remember that last year the Brazilian crop gained 12M MT between February and final, and this year 3.3% more acreage was planted with very little stress during the growing season.
 
Meyer adds, “The only item of note in corn would be the 95M MT Brazilian production estimate after CONAB announced this morning that they expect an 88M MT crop.  We are of the opinion the global corn balance sheet can get below 200M MT this year against the 203M MT in today’s report and a lot of that will be related to a smaller Brazilian crop which we currently estimate at 90.25M MT.”

 

----Mike North, Commodity Risk Management Group, says the big story is the USDA's soybean ending stocks number.

 

"The central themes are that soybean exports  which have lagged the normal pace to hit projections were adjusted accordingly.  Corn exports increased to accommodate shrinking Argentina production."

--Brian A. Rydlund, CHS Hedging Market Analyst, says that the USDA report was harsh on soybeans.

US carry out goes up, from 470 mil bu. to 530 mill. bu., by cutting exports 60 mil bu., crush unchanged.  
 
CORN:     US carryout cut 125 mil bu., all because exports being raised by 125 mill. bu., from 1.925 bil bu. to 2.050 bill. Ethanol use unchanged at 5.525 bill. bu., but can go up in future reports. Corn for feed unchanged at 5.550 bill. bu. So, this report was dull beyond the export parts of both corn and soybeans.  
 
 
WHEAT= Exports cut by 25 mill. bu., pushing US carryout over 1 bil bu. That is heavy.               
 
WORLD wheat carryout was cut by about 2 mmt. Corn world carryout off almost 3 mmt, via production cuts mainly. Soybean    carryout basically unchanged.
 

 

Mike

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At the close:

At the close, the March corn futures finished 1/2¢ higher at $3.65 3/4. May futures finished 1/2¢ higher at $3.73 1/4. March soybean futures settled 4 3/4¢ higher at $9.87 3/4.  May soybean futures finished 4 1/2¢ higher at $9.98 3/4. March wheat futures finished 4 1/4¢ lower at $4.56 1/4. March soy meal futures ended $6.30 per short ton higher at $341.70. January soy oil futures finished 0.35 lower at 32.21¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.75 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 584 points lower.

 

Mike

 

------

At 10:55am:

 

USDA released big Weekly Export Sales numbers for corn, but they were expected.

 

Wheat= 415,500 mt. vs. the trade’s expectations of between 300,000-500,000 metric tons

Corn= 1.769 million metric tons vs. the trade’s expectations of between 1,000,000-2,000,000 metric tons,

Soybeans= 751,600 mt.  vs. the trade’s expectations of between 250,000-750,000 metric tons.

 

Mike

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At mid-day:

At mid-day, the March corn futures are 3/4¢ higher at $3.66. May futures are 1¢ higher at $3.73. March soybean futures are 9¢ higher at $9.92.  May soybean futures are 8 1/2¢ higher at $10.02. March wheat futures are 4¢ lower at $4.56. March soy meal futures are $8.50 per short ton higher at $343.90. January soy oil futures are 0.18 lower at 32.38¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.85 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 618 points lower.

 

Mike

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In early trading:

At 9:00am, the March corn futures are 3/4¢ higher at $3.66. May futures are 1/2¢ higher at $3.73. March soybean futures are 5 3/4¢ higher at $9.88.  May soybean futures are 5 1/2¢ higher at $9.99. March wheat futures are 4 3/4¢ lower at $4.55. March soy meal futures are $2.60 per short ton higher at $338.00. January soy oil futures are 0.06 higher at 32.62¢ per pound.  In the outside markets, the NYMEX crude oil market is $0.04 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 137 points lower.

 

Mike

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Soybeans were higher while wheat was lower overnight, likely on position squaring ahead of today's WASDE, though analysts don't expect any major changes in the balance sheet. Some believe the USDA will lower its South American corn production outlook, which could reduce to global stockpiles estimates. Soybean production likely won't be changed much, according to surveys done by various news organizations. Beans were up about 3 cents, wheat was down 2-3 cents and corn was unchanged overnight. Ethanol production and stockpiles both rose last week, and in weather news, another large storm -- this one stretching from Montana and reaching as far east as Michigan -- is expected to dump up to 11 inches of snow in Montana and as much as 8 inches in Iowa and Illinois starting this evening. Get all the details in today's 3 Big Things at https://www.agriculture.com/news/three-big-things/3-big-things-today-february-8.

 

Brent Crude Oil = down 0.9%.

West Texas Intermediate = down 0.9%.

Dollar = up 0.3%.

Wall Street = U.S. stock futures higher in pre-market trading.

World Markets = Global stocks lower overnight.