- Today’s USDA figures contained a few surprises but not shocks, as has been the case in prior years. It is probably fair to say that the general view is that the report is pretty much neutral. We will now be watching the weather and how it develops into the early summer.
- For the record, stocks of corn were reported at less than average trade estimates, 7.006 vs. 7.099 billion bu, however it must be borne in mind that this will be the 4th largest on record! March 2010’s stocks were reported at 7.694 billion bu, this year’s figure is (only) 688 million bu lower. Seedings for the 2014 season were estimated at 91.691 million acres, below average trade estimates of 92.748, well below last year’s figure. Such a level will be the lowest acreage since 2010’s 88.2 million acres.
- Soybean stocks, at 992 million bu are below last year (only just) but higher than average trade estimates. 2014 seedings are estimated at 81.493 million acres, which if achieved, will be a record, an increase on last year and above average trade estimates. An average yield of 45 bu/acre, based upon the estimated acreage, would provide a record large output of 3.612 billion bu leaving end stocks to nearly 400 million bu. This is a bearish number!
- Wheat stocks at 1.056 billion bu were above average trade estimates of 1.042 and all wheat seedings at 55.815 million acres were mid-range but below the average of trade estimates.
- The eagerly anticipated report is out, and will tomorrow be fish and chip wrappers, so where now? Whilst we may well have seen a supportive March corn stocks figure, fundamentally, given “normal” spring and summer growing conditions there is a substantial downside risk to corn prices, which will, in turn, impact wheat prices – adversely.
- The key now, and into the next few months will be weather in the central US and world. Potential does exist for delays in seeding, as we have previously discussed, but it appears there is a fast building El Niño weather pattern, which leaves little chance of a summer drought.
To download the report summary in pdf format please click on the link below: