Floor Talk March 31 (Report Day)
The USDA Prospective Planting Report Is Bearish
U.S. Planting Acreage
Corn= 90.0 million vs. 94.0 million a year ago
Soybeans= 89.5 million vs. 83.4 a year ago
All Wheat=46.1 million vs. 50.1 a year ago
Corn= 8.618 billion bushels vs. 7.82 bill. a year ago
Soybeans= 1.73 bill. bu. vs. a year ago
Wheat= 1.65 bill. bu. vs. 1.372 bill. bu. a year ago
--Sal Gilbertie, Teucrium Trading, says that today’s report showing the intentions of farmers to plant the lowest number of wheat acres since recordkeeping began are having an immediate positive effect on wheat prices, and the 13% increase in year-on-year December through February wheat usage seems to be adding momentum to prices.
“Soybean prices are under pressure due to the double impact of the potential of more future supply due to record large planted acreage intentions combined with a decline in disappearance in the December February time period,” Gilbertie says.
Gilbert adds, “The eight percent year-on-year decrease in soybeans stored on farms indicates that farmers are serious about increased soybean plantings; they are already beginning to make room for the coming year’s crop.”
Gilbertie adds, “However, the large increase in soybean planted acres is coming at the expense of corn acres, corn prices are being supported accordingly and seem to be mitigating some of the price declines in the soybean markets.”
Mike North, President Commodity Risk Management Group, says the USDA dared not to cross the 90 million acre line.
“However, they are dancing on it vigorously with an announced corn planting number of 90.0 and a soybean figure of 89.5. This will further embolden the spread traders who have been eyeing the corn/soybean opportunity,” North says.
Combined with accelerated disappearance of quarterly stocks (usage left totals only 10% higher YOY), the corn estimates provide short term optimism for corn, North says.
“However, that optimism will be tempered by weather and the speed and ease by which seed moves to soil. After witnessing a 6 million increase to acreage, soybean bulls will have to sell the strong disappearance to maintain any foothold in the market. A lower trade followed the soybean estimates. However, the mildly lower reaction coupled with a good corn story and the end of a month/beginning of a new quarter may be attractive for speculators looking to return to the market following today's release,” North says.
--Deanna Hawthorne-Lahre, StatFutures co-founder and trader, says that the report was not friendly to the soybean market.
“Bean acres caught weak longs with their pants down with the 89.5 mill acres,” Hawthorne-Lahre says. The peeps I talk to had this number in mind, but clearly the market didn't believe it.”
She adds, “Another big surprise is the spring wheat acres at 10.6 v. 10.9 last year. The trading pit was whispering under 10, so this definitely caught the big boys wrong.”
“Corn acres at 90.0 million is a bit surprising but I was figuring 91.5, so no biggie,” Hawthorne-Lahre says. Stocks build continues to weigh on the market as well - wheat stocks up 21% year-over-year is pretty amazing, given the lower acres last year.”
--Michael Rusch, Sales Director- Ag/Commercial for Stewart-Peterson, says that the corn market reaction to the report is surprising.
“With lower than expected acres, higher carryout, the reaction,so far, is a little disappointing only being up a few cents,” Rusch says.
With 90.0 million acres and trend line yields at 170 bushels per acre (assuming demands stays as predicted), Stewart-Peterson sees a 2.2 bill bu carryout.
“If trend line yield drop to 160 b.p.a., we see potential carryout drop to just under 1.5 bil bu. And the odds of 5 record crops in a row is in question. So, the point is that we don’t need to see a disaster of a crop to see carryout drop far enough below current levels to support price,” Rusch says.
“So far, the reaction to the bearish soybean report is mildly supportive, considering that we are not down more than 12-15 cents. It was probably built into the market over past few weeks,” Rusch says.
With 89.4 mil ac expected and trend line yield of 48bpa we would see carryout (assuming demands stays as expected) of 492 mil Bu…Bearish
Yield at 45pba sees carryout drop below 250mil bu. Weather and odds of another strong crop will be watched closely.
At the close:
At the close, the May corn futures settled 6¢ higher at $3.63 1/2, while December futures finished 6 3/4¢ higher at $3.87 3/4. May soybean futures closed 17¢ lower at $9.46. November soybean futures finished 8 1/4¢ lower at $9.55. May wheat futures ended 3 1/2¢ higher at $4.24. May soy meal futures closed $7.20 per short ton lower at $307.70. May soy oil futures closed $0.19 lower at 31.82¢ per pound. In the outside markets, the Brent crude oil market is $0.34 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 62 points lower.
At mid-session, the May corn futures are 4 3/4¢ higher at $3.62, while December futures are 4 3/4¢ higher at $3.85. May soybean futures are 13 1/2¢ llower at $9.49. November soybean futures are 8 1/4¢ lower at $9.55. May wheat futures are 5¢ higher at $4.26. May soy meal futures are $3.40 per short ton lower at $311.50. May soy oil futures are $0.48 lower at 31.53¢ per pound. In the outside markets, the Brent crude oil market is $0.08 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 26 points lower.
In early trading, the May corn futures are 1 1/2¢ higher at $3.59, while December futures are 1 3/4¢ higher at $3.82. May soybean futures are 4¢ lower at $9.59. November soybean futures are 3 1/4¢ lower at $9.60. May wheat futures are 1 1/2¢ higher at $4.22. May soy meal futures are $0.90 per short ton lower at $314.00. May soy oil futures are $0.20 lower at 31.81¢ per pound. In the outside markets, the Brent crude oil market is $0.15 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 44 points lower.
Soybeans were slightly lower again overnight after yesterday hitting a five-month low while corn and beans were a bit higher. Beans lost about 2 cents while corn and wheat were up about a penny each. The USDA's stocks and prospective plantings reports are out today at noon in Washington. For plantings, soybean acres will probably see a big jump while corn will see a big drop, according to the surveys that are out there. Analysts are suggesting bean area will be pegged at 88 million acres and corn acres at 91 million. Weatherwise, expect some more rain in parts of Illinois through Ohio. Precipitation is also expected today in much of the southern Plains. Happy Friday!
Here's what happened overnight:
Brent Crude Oil = 0.6% lower.
West Texas Intermediate Crude Oil = 0.2% lower.
Dollar = up 0.1%.
Wall Street = U.S. stock futures lower in pre-market trading.
World Markets = Global stocks mixed after EU consumer price numbers.
Re: Floor Talk March 31 (Report Day)
Re: Floor Talk March 31 (Report Day)
a questions.........corn at 90 million acres.........what if, we have adbandonment of 2% (storms, etc)....that would put us at 88.2 million
acres...........with a 5% decline in trendline yields of 170 bu (161.5 bu/ac)....that leaves us with 14,200 million bushels.
last year was 15,266 million bushels......basicly 1,000 million less........how does that come out as a price..........
if we keep use/exports the same.....??????????
Re: Floor Talk March 31 (Report Day)
bean number........i'm being told that some of the wheat will be grazed out, and if moisture, to try beans.....you could in theory
get some crop insurance for wheat, then try the beans......don't know if grazeout would qualify...or not, I guess a lot would depend
on how good the wheat was.
so did the numbers include the possible wheat to beans acres ??
yep, people can make more money on beans than corn........as someone said, cheapest crop to put in....but if we could see
a good jump in the corn price, could we see a surprise shift to corn from beans ??
yes, with NC local quote of $ 8.49 a bu..........i'll let you do the math...........
so much for the Gulfstream G550 this year