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MARKET COMMENTARY

USDA December 12, 2017 Report

Tuesday, December 12, 2017, 1:12 PM
Submitted by: Landus Cooperative


Current markets:

Corn down 1/2c

Soybeans down 4c

 

As most in the trade expected, today’s USDA WASDE report was a non-event. A few marginal changes gave little reason for price movement, so we find ourselves trading steady on corn and down 4c on soybeans. The January report is typically where we get more fireworks – it sets up the trade direction for the balance of the winter & early spring. In addition to Supply & Demand estimates in the January report (and final production #’s from this harvest), we also get the quarterly stocks report. This is the USDA’s best guess of what we have on hand for grain after the first quarter of the crop year (Sept 1 through Dec 1).

 

A few changes in today’s report are worth highlighting. Corn ending stocks dropped by 50 mln bu – disappearing into a larger ethanol usage estimate of 5,525 bln bu. Corn ending stocks now sit at 2.437 bln bu, right in the middle of the range of pre-report estimates. Soybean exports dropped 25 mln bu, seed use increased 5 mln bu, and ending stocks increased 20 mln bu to 445 mln bu. At the end of the day, these ending stocks #’s are very healthy and keep the market “satisfied” (i.e. – low volatility, no need for change). The export picture isn’t improving for either of our staple commodities – we need to watch this closely as a new South American crop comes to market in the coming months.

 

We turn our focus again to South American weather, which has become more favorable in the last few days. Without a major disruption for our neighbors to the south or another unforeseen event, there’s little reason for the market to make a significant change. The next big event the market will watch is Planting Intentions in March.

 

 

 

 

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