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MARKET COMMENTARY

Morning Comments April 12, 2017

Wednesday, April 12, 2017, 7:04 AM
Submitted by: Landus Cooperative


OPENING CALLS:

CORN steady to 1 higher

SOYBEANS  +4 to +6


 

Yesterday’s WASDE report from the USDA fell into the category of buy the rumor, sell the fact for much of the trade after 11 a.m. Corn was fairly steady before the report and then traded as much as 4 lower before finishing the day 1/2 lower on both the May and Dec contracts. In the report, the USDA increased their estimate for ethanol by 50 million, but also reduced feed usage by 50 million, so the next result was a 2016/17 carryout of 2.32 billion, same as the estimate in March. World ending stocks rose from 220.7 MMT to 223, due to increased crop estimates in both Brazil and Argentina.

 

For soybeans, May closed down 2 1/2 cents and November was off 1 1/4. The USDA increased the 2016/17 carryout from 435 million to 445. They increased seed usage by 19 million, which makes sense given their acreage estimate, but decreased their residual number from 33 million to 14 million, which seems a little suspect. But, that is what they adjust in order to get to the bottom line number they are aiming for. Keep in mind that the 2015/16 carryout was 197 million. This will keep some pressure on the top side of beans for a while, and make it unlikely that we’ll see any major rallies like we experienced last spring/summer. The other negative from the report was the increase in world ending stocks, up from 82.8 MMT in March to 87.4 now. This is mostly due to, once again, South American crops. Brazil is now seen at a record 111 MMT (+3 MMT); Argentina is now pegged at 56 MMT (+500,000 MT) and a big surprise with Paraguay increasing almost 1 MMT to 10.1. The Board is higher this morning on beans, as the bean/corn ratio has weakened pretty substantially the past 30 days or so and is no longer favoring beans so much. This is making some wonder if the 89.5 million acre soybean number released at the end of March will be the highest that number shows the balance of the year, and will be reduced in subsequent reports.

 

PLEASE NOTE: Since this Friday is a holiday, Good Friday, and the Board of Trade will not be open. Trade will resume Sunday night.

 

 

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