Market News

Acreage, stocks reductions push corn sharply higher

Soybeans were mostly lower on consolidation and old crop/new crop spread trade. All months started sharply higher following the lead of corn but couldn’t follow through due to the increasingly bearish fundamentals. USDA’s projecting record U.S. soybean acreage, pressuring the new crop contracts and while quarterly stocks were smaller than expected, they were up 3% from last year, supporting old crop. There was also spread trade noted with corn, pressuring beans and supporting corn. Soybean meal was lower on product spread trade and spillover from beans while oil was up on that spread trade and oversold signals after Tuesday. According to the Buenos Aires Grain Exchange, soybean exports for April were 1.8 million tons, with 80% purchased by China. USDA’s weekly export sales report is out Thursday at 7:30 AM Central. Soybeans are pegged at 300,000 to 600,000 tons, meal is seen at 50,000 to 150,000 tons and oil is placed at 5,000 to 20,000 tons.

Corn was nearly limit up on the USDA numbers, along with fund and technical buying. USDA sees 2010 as the second largest year for planted area ever, but still reduced the estimate from the last guess, taking the production projection down more than 100 million bushels, and it doesn’t take into account weather issues since the start of June. Quarterly stocks were smaller than expected on very strong demand with record implied quarter to quarter usage. According to Dow Jones Newswires, at least some of the increase in usage was linked to a lower quality 2009 crop. That reduction in planted area and greater than expected usage add up to roughly a 500 million bushel reduction in carryover, leading to the bullishness. Putting it mildly, the trade’s going to keep very close watch on crop conditions, yield projections and EPA’s decision on E15. Ethanol futures were higher. Weekly U.S. corn export sales are expected to be between 700,000 and 1.45 million tons.

The wheat complex hit new four and a half week highs on short covering, fund buying and spillover from corn with the Chicago pit outgaining the rest of the complex. USDA numbers were bearish with the as of June 1 planted acreage projection and quarterly stocks estimates both larger than expected. That said – there are quality concerns and if corn prices continue move higher, the trade expects increased feed demand for soft red winter wheat. European wheat was higher on concerns over global production due to continued drier than normal weather in northern Europe; November Paris was up 3.6% and November London was 3.1% higher. Also, Dow Jones Newswires reports Russia’s Prime Minister Vladimir Putin told a government meeting Russia’s grain harvest could drop 3 million to 6 million tons from initial estimates for 90 million to 93 million tons due to hot and dry conditions in central and southern growing areas. Philippines bought 25,000 tons of optional origin feed wheat. Weekly U.S. wheat sales are estimated at 200,000 to 500,000 tons.

Add Comment

Your email address will not be published.


 

Stay Up to Date

Subscribe for our newsletter today and receive relevant news straight to your inbox!