Morning Comments March 31, 2017
Friday, March 31, 2017, 8:03 AM
Submitted by: Landus Cooperative
Corn: 1 to 2 cents higher
Soybeans: 1 to 2 cents lower
Today is the day!
At 11:00AM, we will have USDA numbers for both prospective plantings and quarterly stocks. We are expecting something around 91 million acres for corn, down 3 million from 2016. For beans, the average estimate is 88.2 million, compared to 83.4 million last year. Keep in mind, this is the USDA’s best estimate today, and what actually gets planted will be greatly impacted by weather over the next 45-60 days.
Perhaps as important, if not more important, for today’s price direction, will be the quarterly stocks numbers. For corn, the range of analyst estimates is 8.205 to 8.90 billion bushels, with an average guestimate of 8.534. for soybeans, the range is 1.627 to 1.885 billion with an average of 1.684.
Yesterday, both the nearby and new crop corn contracts closed down a penny. Funds sold 2,000 corn contracts ahead of the reports being released, and are currently net short 115,000. With the corn market mostly sold off in anticipation of the reports, it will take a huge surprise to further increase selling. We are watching for 1) do the number of acres switching from corn to beans reflect what trade is expecting, and 2) did competing grains take some demand from corn feed resulting in larger than expected quarterly stocks?
Soybeans had another hard day yesterday, with May closing down 6 cents at $9.70 and the November contract closing down 4 ¾ cents at $9.69. Funds were sellers across the board, selling 4,000 beans, 1,000 meal and 2,000 oil contracts. Currently, they are long around 28,000 bean contracts. Prices have been under so much downward pressure lately, it would take a huge deviation from expected numbers to push them down further in the short run. With such a bottom built in, it is the hope that weather concerns will present better selling opportunities in the long run.
Stay tuned after the report for an update.