June S&D Recap
Wednesday, June 10, 2015, 3:06 PM
Submitted by: Eric Kist
Following the release of the USDA’s monthly Supply and Demand Report, corn and soybean futures saw some back-and-forth trading action, before both eventually drifted lower through the afternoon. For the day, nearby corn futures lost 8 cents, while soybeans closed down 2 cents.
Overall, changes to this month’s S&D picture were minimal. For old crop corn, the only change made was a reduction in corn used for ethanol production, which was lowered by 25 million bushels, based on the idea of improved efficiencies in ethanol production. As a result, the 2014/15 corn carryout number increased 25 mbu to 1.867 billion bushels, and the only adjustment to the 2015/16 new crop estimates was a resulting 25 mbu increase to supply and final carryout, currently estimated to be 1.771 billion bushels.
As for soybeans, 14/15 ending stocks were reduced by 20 mbu to 330 mbu, down from 350 mbu the month before. Spectacular crush margins have soy processors running at full capacity, drawing an additional 10 mbu of beans, and exports have been surprisingly consistent to date, raising export demand 10 mbu as well. For new crop, 15/16 ending stocks were reduced from 500 mbu to 475 mbu, as the carry-in was reduced 20 mbu, and soybean crush demand was increased 5 mbu from the prior month’s estimates.
Overall, a quiet report, as nothing overly-supportive for either corn or beans was to be found. Fundamentally, the supply side of the equation still heavily outweighs demand, and with excellent crop progress to date, the market is anticipating another robust harvest.