Grain and oilseed trade got some shocker numbers in the reports and market action was sharply lower in corn, actively lower in wheat and higher in beans. The biggest report focus was corn and soybean yield and production totals. Corn yield was a whopping, record bearish 181.3 bu/ac, yet ending stocks were still bullish at 1.774 bln. Soybean yield was a monster as well at 52.8 bu/ac with carryout badly bearish at 845 mln. New crop world ending stocks totals were all slightly larger than the pre-report estimates. Old crop world numbers were higher than the guesses in corn and wheat and a little lower in beans. Big picture round numbers have world wheat ending stocks down 13 mmt’s from a year ago, world soybean stocks up 13.5 mmt’s from the old crop number and world corn down 37 mmt’s.
For corn, US ending stocks for new crop are pegged to decrease 228 mln bushels from last year’s crop. With the world number off 37 mmt’s, one would think a double digit lower corn close was a bit unwarranted, but that’s where it landed yesterday…
Fund activity yesterday was estimated as buyers of 9k beans, sellers of 11k wheat and giant seller of 47k corn. Those funds might have been caught staring at that one tree, which was record corn yield and lost sight of the forest, which was the sharp drop in ending stocks and stocks to use ratios.
Weekly export sales numbers were neutral in corn and soybeans this morning, bearish in milo and wheat. Corn sales came in at 30.5 mln bushels, milo zero, soybeans 25.5 mln and wheat 14.2 mln. Cumulative corn sales are now sitting at 597 mln bushels versus 414 mln at the same time a year ago. Soybean sales totals add up to 625 mln, which is 1 mln bigger than last year at the same time. Wheat sales are 358 mln versus 469 mln last year. USDA pegged wheat exports in this marketing year at 124 mln bushels larger than the last marketing year. With the current pace lagging a year ago by 111 mln already, things don’t look good at all for the wheat market. Too much potential being talked about and way too little reality. Potential is, we’ll see exports pick up because Russia, the EU and Australia have smaller crops than a year ago. Reality is, that has done absolutely nothing to date to improve the US wheat export pace. Sad, but 100% true reality at the same time.
8am daily export announcements had a long list of new business reported this morning. 80k mt’s of US next year new crop beans were sold to unknown destination, 40k mt’s of current crop year beans sold to unknown, 108k mt’s of beans sold to Mexico and 143k mt’s of US corn sold to Costa Rica.
Other export news from yesterday showed Egypt’s latest wheat tender being filled 100% with Russian wheat, buying 235k mt’s at $240.15 delivered.
6-10’s last night showed above normal temperatures for all of the Central and Southern Plains, as well as the majority of the Corn Belt and out to the East Coast. The exceptions were from all of Minnesota, North Dakota and the northern 2/3 of South Dakota it was normal to below temps. Precip was below normal across Oklahoma and Texas wheat country, stretching into southern Missouri and the southern half of Illlinois. Normal to above precip was on tap for everywhere north of those areas.
Pete Loewen
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Matt Burgener / Alex Gasper
www.loewenassociates.com