Analysts see few surprises in supply and demand report
February 8, 2019 By Larry Lee Filed Under: Ag economy, Crops, News, Risk Management, Trade, USDA
Market analysts say the long-awaited USDA supply and demand report had no major surprises, but there were some unexpected details. University of Wisconsin-River Falls Economist Brenda Boetel tells Brownfield most analysts were expecting corn use for ethanol to drop much more than it did. “Personally, I was thinking it would go down by close to 100-million bushels, and they actually only reduced it by about 25-million bushels, but where it was a bigger reduction was actually feeding residual. They reduced that by 125-million bushels and I thought it would go down a little bit. I didn’t think it would go down that much.”
Boetel was expecting possible market corrections after a long period without USDA information, but she says that didn’t happen. “It doesn’t shake the market as much as I was expecting it to. From the supply side, it’s gone down further than I expected but the demand side also decreased further than what I was expecting so those two things kind of evened it out.”
Broker Carl Babler with Atten Babler Commodities tells Brownfield the lower ending stocks in the report weren’t enough to bring prices up. “Anytime you decline your carry-out, it’s beneficial to price, however, a 45-million drop in both corn and beans is not enough to make much noise.”
Both Boetel and Babler say with prices staying about the same and more corn acreage expected, it might be the right time to start selling old crop corn and beans.See related stories here:USDA report a dudUSDA: Record high soybean production in 2018Adjusted beef production forecast could be good newsUSDA lowers U.S. corn, soybean ending stocks
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