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Analysts react to WASDE report

Tuesday’s WASDE report from USDA has dimmed already slim hopes for a corn market rally this fall.

Speaking with Brownfield at the Husker Harvest Days farm show, DTN market analyst Darin Newsom said if USDA’s numbers are right, corn is overpriced.

“If we just take the bottom-line, basic fundamental tenet of ending stocks-to-use, we’re probably 50 to 60 cents overpriced in cash corn right now,” Newsom said. “If we continue to hold prices up here on the futures and cash market, then what it’s telling us right now is the market doesn’t believe these numbers.”

FarmFutures analyst Bryce Knorr said there were a couple of bright spots in the report for soybeans, including an increase in the forecast of Chinese imports.

“We still have pretty robust demand for soybeans,” Knorr said. “Also, it looks like Brazil won’t have aggressive expansion this year. They’re going to be whittling down their inventories if they only have average yields.”

And Knorr says the fact that global soybean carryout was lowered, for both the 2016 and 2017 marketing years, is also a positive.

AUDIO: Darin Newsom

 

AUDIO: Bryce Knorr