AM Comments 5/13/15
Wednesday, May 13, 2015, 8:05 AM
Submitted by: Eric Kist
The charts show that corn traded mixed overnight and beans are trending higher this morning, following yesterday’s USDA Supply and Demand report for May. This month’s S/D reports draws increased interest, as it provides the first glimpse of the balance sheet for the upcoming crop year using actual surveyed acreage data and trend-adjusted yield numbers based on early-season planting progress.
For corn, the first official estimate for 2015 production was reported at 13.63 billion bushels, using a yield number of 166.8 bu/ac. Both planting acres and the average yield number are expected to be lower than last year’s record crop, and consequently the total production number for corn is 586 million bushels lower than last year’s. Expected ending stocks numbers for both old crop and new crop are 1.85 bln bu and 1.75 bln bu, respectively.
As for soybeans, markets yesterday responded harshly to the S/D report, as new crop ending stocks estimates were too large to ignore. The ending stocks number for 2015/16 is expected to grow from this year’s already high stocks number, with the first official estimate pegging next year’s ending stocks number to be 500 million bushels—the highest since the 2006/2007 crop year. Nearly 1 million additional acres are being planted with soybeans, and the average yield used by the USDA was 46 bu/ac, resulting in a total production number of 3.85 billion bushels.
The lone bright spot for soybeans in the May S/D report was a reduced ending stocks number for old crop beans by 20 million bushels, as soybean demand continues to be one of the lone bright spots.
Opening calls for today’s trade:
Corn: mixed/slightly higher
Beans: 1-2 lower
Have a great day!