Headlines:
- Cereal futures rally ahead of US plantings forum
Grain futures slumped, as funds pulled back, and US soybean sowings were forecast at a record high. The USDA at its annual outlook conference, forecast US soybean plantings at 88.0m acres. The figure, which would be a record high, was some 400,000 acres above analyst expectations. Ideas of US plantings are being boosted by the recent rise in prices, for soybean in particular but across all main crops. The US insurance guarantee for soybeans is up about 15%, with wheat insurance up 10%, and corn up about 3%. “Expectations for record soybean acres and weak Chinese markets continue to weigh on the soy complex”.
- US farmers to sow even more cotton, soy this year than thought
US farmers will sow even more cotton and soybeans than investors had expected, encouraged by weak grain prices which are set to send wheat area to a record low, and drive 3.6m acres out of production altogether. The US Department of Agriculture, at its annual Outlook Forum to kick off formally 2017-18 estimates, forecast US soybean sowings this year rising by 4.6m acres to a record 88.0m acres. The increase in area, to a level above the 87.58m acres that analysts had expected, reflects soybean prices which have so far this month averaged nearly 2.6 times as much as corn, the main competitor in US farmers’ spring plantings programmers. “The last time the ratio during February was this favorable to soybeans was in 1997,” Robert Johansson, USDA chief economist, told the conference.
Summary:
Today was opening day for the USDA’s annual Outlook Forum. The USDA Chief Economist, Robert Johansson, raised projected Soybean plantings to 88 million acres. Producer perspective has been that Beans would be more profitable than both Wheat and Corn which in turn led to the big increase from projections from 3 months ago. Corn planting projections came in at 90 million acres and Wheat projections were at 46 million acres. Chinese demand is expected to bring export sales along to about 136 billion acres. We could very well be looking at another crop that exceeds 4 billion bushels if the projected 88 million planted acres comes to fruition.
The price action today was consistent with our expectations. It was all red across the board today. All three markets have run up into resistance and by our assessments are due for a correction. May Corn was down 5.75. Beans was the biggest loser of the day. The July contract was off 9.25 and May Beans lost 8.50. July Wheat rounded out the day giving up 1.75.
