PM Comments 5/9/2014
Friday, May 9, 2014, 4:05 PM
Submitted by: Joel Pudenz
What initially seemed to be a bullish S&D report turned out to pressure corn 10 to 12 cents lower today. Increases in both export and ethanol usage estimates ratcheted U.S. ending stocks below 1.2 billion bushels. This may cause some head scratching as ethanol usage has been lower than needed to meet year-end estimates and unshipped corn sales are high. The market seemed to focus most on world ending stocks estimates which increased by over 400 mln. bu. (35% of the current carryout in the U.S.). The increase came from robust production in Brazil and a smaller demand outlook.
Soybeans ended the day higher as ending stocks were lowered (this was expected) to 130 mln. bu. The net decrease derived from stronger export estimates, crush numbers, and imports. The world outlook still has a nice size carryout (which decreased slightly in today’s report).
We got our first look at the 14/15 balance sheet today. Corn acreage is down to 91.7 mln acres but total production remains constant at 13.9 bln. bu. with an assumed yield of 165.3 bu./acre. Corn carryout looks to be a strong 1.726 bln. bu.
Soybean acreage is estimated to be 81.5 mln. acres (up 5 mln. from last year). Total production is 350 mln. bu. higher with a 330 mln. bu. carryout – current stocks-to-use is 3.8%, projection for next year is 9.6%. We will see how the market digests these projections as 14/15 planting continues.
Have a great weekend!