AM Comments 08/12/16
Friday, August 12, 2016, 1:08 PM
Submitted by: Dustin Weiner
It was a quiet night session with corn and beans spending time on both sides of yesterday’s final settlement price. The August S&D of course is out at 11am today which should help clear up a lot of questions (and probably give us a few new questions afterwards). The trade is expecting the USDA to print a corn yield somewhere above 170 bpa for the U.S. (it was 168 bpa in the July report). Many feel that this will be the “biggest” production number we see all crop year, partly because the data the USDA will use in this report factors in population information, but not necessary kernel depth/size. Most feel that after the production number is digested all eyes will quickly turn to demand projections which will receive most of the focus for a while.
So overall for today, it’s the unknown combination of how increased supply and increased demand shake out that will give us direction post-report. If you want a reason to lean to the friendly side… if we assume that the production number will be the biggest we see all year – we have a demand pull that has steadily grown and could continue to do so. Which means you could say that production has downside risk and demand has upside potential in the coming months. I can’t help but wonder how the market would react today if the USDA prints a large production number but leaves the carry-out (ending stocks) unchanged…
Soybeans 2 to 3 cents lower
Have a great day!
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