Headlines:

  • Soybean prices tumble on huge US sowings
    Soybean futures tumbled, after much-awaited US sowing and stocks data showed both figures even bigger than expected. Data from the US Department of Agriculture showed US soybean planting intentions at a massive 89.5m acres, beating average analyst expectations of 88.2m acres, and above even the largest forecasts.
  • US data weighs on soybean futures, lifts cereals
    Markets have been locked in a holding pattern all week, ahead of the highly-anticipated US sowings and stocks data. In the end wheat futures gained on smaller than expected spring sowings, despite a hefty stocks estimate. And given the scale of short-positions in wheat markets, there was room for a rally. “Money managers have continued to increase short positions on Chicago wheat as rains fall across the US Plains, applying pressure to prices but increasing the chance of a short covering rally,” said CRM AgriCommodities.

Summary:

According to the reports that were released today, US Farmers will plant a record amount of Soybean acres. This has also led to reduced Wheat and Corn acreages. The big move of the day was at the hand of Soybean futures that fell 18+ cent for the front month contract. The levels released by the USDA not only blew away last year’s figure of 83.4 million acres but it also well surpassed trade estimates.
The prospect of setting a new record crop sent prices lower but the lows of the day managed to fall right on top of previously projected support levels. The price action for both Corn and Wheat did much better. Corn was actually pegged below trade estimates and Wheat was essential at trade estimate averages. Our projections have been that Corn was due to make a low in early April, so the announcement today is setting up Corn to do just that. Wheat responded well to having its numbers released right
in line with expectations. Nearby Corn was up 7.25 cents and July Wheat rose 5.25. Given that the Corn acres were lower than expected and the carryout was higher, some felt that the move in Corn was a bit muted or subdued. Part of the equation is that demand will need to remain high. If it does, we expect to see a steady advance in Corn through early to mid-June.