Headlines:
- SOYBEANS RALLY, COTTON HITS 2-YEAR HIGH
SOYBEAN FUTURES RALLIED AS THE LONG–TERM WEATHER OUTLOOK IN THE US MIDWEST TURNED HOTTER AND DRIER, WHILE CORN AND WHEAT FUTURES BOUNCED BACK AFTER THE USDA FORECAST A TIGHTER MARKET. IN ITS MONTHLY WASDE REPORT, THE USDA RAISED ITS FORECAST FOR THIS YEAR‘S US SOYBEAN HARVEST BY 80M BUSHELS, TO 3.88BN BUSHELS, AHEAD OF EXPECTATIONS. BUT THE RESULTS WERE SEEN AS NEUTRAL, AFTER EXPORT AND DOMESTIC USE WERE ALSO UPGRADED. WORLD SOYBEAN ENDING STOCKS WERE IN–LINE WITH EXPECTATIONS, AT 67.1M TONNES, DOWN ABOUT 5M TONNES YEAR ON YEAR. “THE WASDE IS STILL UNDER–ESTIMATING OLD AND NEW CROP US SOY EXPORTS. ADDITIONALLY, WE ARE HEADING INTO A WARMER/DRIER STRETCH AS CONFIRMED BY DRIER TONE IN MID–DAY [WEATHER] MODELS“, MR FELTES ADDED. NOVEMBER SOYBEAN FUTURES FINISHED UP 3.0%, AT $10.87 A BUSHEL.
Summary:
Soybean futures traded higher ahead of the WASDE report while Corn and Wheat traded lower. That all changed post the report announcement when all three markets responded by moving into positive territory into the close. Today’s WASDE report reflected Corn carryout moving below the USDA’s June estimate and the trade estimate for the 2015-16 marketing year. The carryout for 2016-17 marketing year was also below the trade’s estimate coming in at 2.08 billion bushels. For the Corn market’s response was to post a positive gain on the day. Soybean Futures briefly moved lower at the onset of the data release but in short order moved to an even stronger position on the day. As discussed in our most recent newsletter the grain and oilseed markets were very much oversold and were sitting near potential key support. The move up today is not entirely surprising.
September Corn closed the day up 3.50 cents and December Corn gained 4.50 cents. September and November beans rose 28.25 and 31 cents respectively and September Wheat rounded out the day with a positive move of 5.75 cents of its own.
Producers that were not able to take advantage of the mid-June highs are perhaps wrestling with the reality that Corn and Wheat may not give them another opportunity to sell at profitable levels. Soybeans historically volatile season has not passed yet so there is better potential for opportunity there. There still is a lot of summer left as far as weather is concerned but Corn and Soybeans were mostly planted early. Additionally crop conditions and soil moisture levels are still relatively good so it may be difficult to get much of a weather rally going outside of some serious weather complications. If prices are not able to get going they might opt to wait for post-harvest pricing opportunities or make use of some creative marketing plans. Please contact our marketing team and learn about what we can design for you.
