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MARKET COMMENTARY

USDA February WASDE Report Summary 02/09/17

Thursday, February 9, 2017, 12:02 PM
Submitted by: Landus Cooperative


Eleven A.M. came and went today without much excitement. With healthy carryouts, low margin environments for demand sectors, and tapped out export sales, there really isn’t much out there to turn around the current market sentiment (large ships are hard to turn). Perhaps the biggest surprise was in what the USDA didn’t change in the February WASDE report. The entire balance sheet for soybeans was the same as January, including the healthy carryout of 420 mln. bushels.

 

Initial reaction for beans was bearish and it has been trading 6c to 12c lower since. Additionally, Brazil soybean projections didn’t change either – even with some other reputable agencies indicating a growing soybean crop. The world carryout dropped by 2 million metric tons bringing the world stocks:use ratio to 24.3% (still a very healthy number). Soybean oil imports rose by 25 mln pounds and no changes were made to the soybean meal S&D.

 

The corn balance sheet had a few adjustments. Ethanol & Industrial use increased by 35 mln bu (in response to a record ethanol production pace), dropping the ending stocks to 2320 mln (15.9% stocks:use). Anything north of 2000 mln for ending stocks should keep a lid on market rallies – right now, it’s a healthy cushion that can absorb increases from the demand side of the balance sheet. World demand increased 7 million metric tons (1/2 from feed) bringing world stocks:use to 21.1%.

 

Current markets:

·       Corn down 1c

·       Soybeans down 6c

 

Have a great afternoon!

 

 

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