AM Comments 08/12/14
Tuesday, August 12, 2014, 8:08 AM
Submitted by: Dustin Weiner
Happy Report Day! Our markets look like they will stay on the weaker side heading into today’s 11am USDA reports (crop production & S&D). When the clock hits 11:00:01… all bets are off.
First, the numbers. In regards to corn production the trade is looking for U.S. corn yield to come out around 170.2 bpa with a production of 14.250 billion bushels. For the last three years the USDA numbers have come in below the average trade guess, if that happens again today maybe we see a little bounce higher? That’s a big maybe. On soybeans the market is expecting bean yields to be raised ever-so-slightly to 45.5bpa with a production of 3.815 billion bushels. The track record of the “trade guesses” on this report is similar to corn – only more exaggerated: In 12 out of the last 13 years on the August production report the USDA has come out with a smaller yield than what the trade was expecting. With August soybean weather being up in the air, this deviation is easier to explain.
At first glance when thinking about this report… A) will the trade be happy with today’s yield increases in corn and B) will the USDA be willing to raise bean production (that is already projected to be a record) with the dry weather we experienced late July / early August?
Corn down 1 to 3 cents
Soybeans down 3 to 6 cents
Have a great day!