PM Comments 2/19/15
Thursday, February 19, 2015, 4:02 PM
Submitted by: Eric Kist
Today marks the Chinese New Year holiday, and according to Chinese tradition each new year brings with it a different animal which is supposed to symbolize the tone for the year. 2015 is the year of the goat, which symbolizes that the upcoming year will be calm and gentle. Contrary to this symbolism, however, volatility has been the word in the corn and bean markets this week. Tuesday we saw nice gains in both markets, followed by losses yesterday, and now today we gained back those losses. Corn closed up 6c at 3.89 ¾, and beans were up 11 ½ cents to close at 10.07 ¼.
The first of the 2015/16 USDA Outlook Conference figures were released this morning, which pegged corn acres for the upcoming year at 89 million acres, and bean acres at 83.5 million acres. The corn acre number was in line with what the market expects, but the bean number came in as a surprise, and may have acted as a bullish force on the bean market. Keep in mind, however, that these acre numbers are a real rudimentary guess at industry expectations, and are not derived from any actual farmer surveys. Also, it is worth noting that at last year’s Outlook Conference, the USDA estimated bean acres for 14/15 at 79.5 million acres, whereas actual total soybean acres for the past year were 83.7 million acres. If nothing else, this preliminary acre estimate at least stimulated a market rally for producers to sell today.
The corn trade benefitted from some spillover support from the bean market, along with a positive ethanol production report. Weekly production numbers were slightly higher than last week, while weekly stocks were slightly lower, suggesting small increase in demand.
Look for weekly export sales numbers tomorrow, along with the USDA’s release of the initial 15/16 balance sheet.
Have a good night!