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MARKET COMMENTARY

USDA Report Recap July 12, 2018

Thursday, July 12, 2018, 12:07 PM
Submitted by: Landus Cooperative


Today’s monthly supply and demand report provided insight into the USDA’s calculations on how the looming trade war with China will affect the American agricultural industry. It was a tale of two separate commodities indeed.

 

Corn ending stocks decreased by a measly 25 million bushels due to the corn production estimate being 190 million bushels higher than last month’s report. Estimated corn usage in food and ethanol production was also taken down by 60 and 50 million bushels respectively. Unfortunately, these numbers are bearish as we continue to trade a bumper crop that we need adequate demand for. Luckily, estimated corn export numbers were 125 million bushels greater than last month’s report. Hopefully, what we lack in domestic demand will be made up in a worldwide push for U.S. corn. Corn futures are currently trading 4-5 cents higher on the heels of this prediction.

 

Soybeans were a different story. The USDA took estimated production up 30 million bushels while decreasing export numbers by 250 million. While bean crush numbers increased again this month, domestic demand cannot make up for the wrench our current trade situation has thrown into the market. In total, anticipated ending stocks were increased by 195 million bushels. Soybeans are currently trading at nine-year lows, with no end to the trade war in sight. This afternoon they are down 1-2 cents and have stretched as low as down 10 after the report came out.

 

 

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