Biggest surprise in last Friday’s USDA data dump was there was no real surprise. Lower corn and soybean carryout due to lower national average yields
expected by most. Insignificant changes to stocks / use ratios leave prices vulnerable? Here forward old crop corn and soybean fundamentals expected to see only cosmetic changes. Next up. March 31st planting intentions.
At 0630 CH19 trading ¾ of a cent lower at $3.73 ½ and now $0.08 ¼ off Fridays high. SH19 giving up $0.01 this morning at $9.13 ½ after a firm close on Friday.
US corn yield down 2.5 bpa Friday was the largest decline from the Nov to Jan report in recent times. A bigger yield decline compared to the average trade guess but demand cuts in feed / residual and ethanol production mitigated impact. Old crop corn now left without a compelling story. Corn market needs some corn sales announcements to China?
USDA corn yield for Iowa at a more believable 196 bpa after having them as high as 206 in the September report. Out of 25 major corn producing states, 19 had a lower yield estimate this report with 5 lower and one unchanged.
USDA lowered Chinese soy imports another 2 mmt to 88 mmt and would now be 6.1 mmt under a year ago. Last time we saw a year / year decline in Chinese soy imports was in the 03/04 crop year with a 4.48 mmt decline. That followed the next year with an 8.87 mmt increase.
Funds have sold an estimated 35K corn over the previous two sessions. Best guess today we have them long a net 46K. Soybean net long estimated at 18K.
USDA has a long history of overstating final soybean carryout early in the year. Some point to this for the rational for bean price action. Rear view mirror
analysis a dangerous methodology.
Export inspections later this morning will show a soybean export pace that calls into question the annual soy export forecast of 1,875 mln bu.
Article Written by: