- Friday is report day!
- Today has seen Chicago markets trade in what has been described as a wildly mixed session with corn steady, soybeans higher and wheat sharply lower in a somewhat more exaggerated repeat of Thursday trade patterns. USDA data had few surprises. Wheat markets reacted most violently to higher than anticipated US seedings, 32.6 million acres vs. 31.4 million expected and 32.7 million last year but the changes were minimal and in line with expectations.
- Final US corn yield was pegged at 176.6 bushels/acre, a 1.2 bushels/acre increase from November although harvested area was reduced some 400,000 acres, largely offsetting yield in overall output. December 1 corn stocks of 12.5 billion bu were a touch above expectation forced a reduction in feed and residual numbers by 25 million bu. US 2017/18 corn end stocks increased 40 million bu month on month to 2,477 million bu. S American corn production was left unchanged.
- US soybean production was cut 33 million bu via reduced yield (49.1 vs. 49.5 previously). Exports were cut 60 million bu to account for the pace of sales and shipments to date. Quarterly stocks totalled 3.16 billion bu, right at trade guesses, and which confirmed a slightly higher pace of domestic disappearance. Crush was raised 10 million bu to 1,950 million. End stocks were raised 25 million to 470, which on paper is not bullish but funds’ massive short position is being pared back. Soy oil stocks were cut 80 million lbs to 1,536, a new five-year low. This morning’s soy complex data just isn’t bearish enough to push the market below major chart-based support.
- US wheat stocks were raised 29 million bu amid reduced feed and seed use. Wheat exports were left alone. HRW stocks were lifted 14 million, SRW 11 million, SRW 1 million, durum 7 million, while white wheat stocks were lowered 4 million. New crop winter wheat seedings were put at 32.6 million, vs. 32.7 a year ago. HRW acreage is estimated at 23.1 million, vs. 23.8 million last year; SRW is estimated at 6.0 million, vs. 5.6 last year. Even by-state changes were minimal. While higher than expected this does exacerbate the battle for acreage across the Plains and Delta. With more land than expected dedicated to wheat production, and with sorghum, cotton and soybean markets performing much better than corn, corn area next year could be lower than expected. In its world numbers, Russian wheat production was raised 2 million mt, but this is more than offset by higher domestic/export demand.
- Black Sea wheat stocks are actually down 500,00 mt from the December’s WASDE. Aussie stocks, too, are down 1 million mt to a new nine-year low 3.2 million mt. Aussie wheat exports were lowered 1.5 million mt. Brazilian soybean production raised from 108 to 110 million mt following a lack of threatening weather so far. Argentine production was lowered 1 million mt. Including Paraguay total S American soybean production is now projected at 175.4 million mt, up 1 million from December but down 7 million mt from last year. No changes were made to China’s soy balance sheet.
- The highly anticipated January reports have now come and gone. Higher than expected wheat acres are noted, but today’s data doesn’t change the overall structure of ag markets. Currencies (the dollar is testing 2017’s low) and S American weather are most important moving forward.