Thursday Afternoon Comments (6-30-16) July corn closed 14 cents lower and CZ closed 12 cents lower as the surprise of higher than expected corn acres and stocks weighed on futures. (CN traded an 83 cent range in June.) Corn planted acres at 94.1 mln. were 1.2 mln. acres higher than the average pre-report estimate. Analysts that forgot producers like to plant corn and had spring conditions "to keep on planting" were re-reminded of this fact. With trend yield the U.S. could realize a 14.6 bln. bu. corn production and 16/17 ending stocks near 2.3 bln. bu. There is enough weather uncertainty to keep everyone from getting too aggressive with yield estimates but the weather system moving through this weekend hopefully helps those looking for some precip. Quarterly stocks at 4.72 bln. bu. were 200 mln. bu. higher than expected. The divergence between the western corn belt and eastern corn belt continues to widen as the western belt has 431 mln. bu. more bushels of corn compared to last year while the eastern belt has 177 mln. bu. less corn on hand. Weekly export sales came at 18.4 mln. bu. for old crop and 21.1 mln. bu. for new crop. YTD commitments for 15/16 are 1,846 mln. bu. vs. 1,798 mln. bu. at this time last year. Japan and Mexico remain the buyers of note in both crop years. Mexico bought 120 tmt U.S. YC split between crop years in an export announcement this morning.
Soybeans had an interesting day to say the least. A quick 20 cents lower right after the 11 AM numbers were release followed by an immediate rally to 35 cents higher: someone made a lot of money and someone lost a lot of money in a very short time-frame. At session end, SN 30 cents higher and SX almost 41 cents higher. (SN traded a $1.30 range in June.) Acreage at 83.7 mln. acres vs 83.8 expected apparently allowed those that want to be long beans the green light. Quarterly stocks of 870 mln. bu., 40 mln. bu. above expectations were largely forgotten (western belt has 151 mln. bu. more beans than last year, eastern belt has 69 mln. bu. more than last year) as the trade is bullish improving export demand cutting sharply into 15/16 and 16/17 ending stocks estimates. An increase of 65 mln. bu. in export demand for 15/16 and 125 mln. bu. in 16/17 has some analysts predicting ending stocks in 15/16 at 300 mln. bu. and well below 100 mln. bu. in 16/17. Bulls are looking for $13 SX bean futures now. Weekly export sales were very good at 26.8 mln. bu. for old crop and 29.3 mln. bu. for new crop. YTD 15/16 commitments are 1,861 mln. bu. vs. 1,854 mln. bu. last year. Unknown destinations continues to be the buyer of old crop and China in new crop (China thought to be the unknown destination in old crop sales too.)
Wheat closed slightly higher and was mostly on the sidelines. All wheat acres at 50.8 mln. were roughly 1 mln. acres higher than expected but quarterly stocks at 980 mln. bu. were right at expectations. Weekly export sales of 23.7 mln. bu. bring YTD commitments to 281 mln. bu. vs. 215 mln. bu. last year. Too much wheat in the world and U.S. will continue to weight on futures.
USDA - June
USDA – March
USDA - 2015
USDA – June
June 1, 2015
March 1, 2016
Corn acreage up 500,000 acres. Trade was expecting a decrease. Bean acreage up 1.5 Mln. from March, but a little less than expectations. Corn and bean stocks higher than expected. 7-day rainfall forecast (June 30-July 7)
Mid-West Drought Monitor (released 6/23)
Comments from Mid-Co Commodities.
Have a good & safe night!
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