US - The USDA’s Grain Stocks and Prospective Plantings reports both pointed to larger than expected corn supplies and smaller than expected soybean supplies, write Steve Meyer and Len Steiner.
Corn futures were sharply lower in Tuesday trading while soybeans and soybean meal were higher.
Some highlights of the two key grain reports are:
Lower than expected but still record high soybean plantings are likely this spring.
The 84.635 million acres in Tuesday’s reports is nearly 1.3 million fewer than the average of analysts’ pre-report estimates but is comfortably within the range of those estimates.
It represents a 1.1 per cent increase in soybean acres versus last year when the current record of 83.1 million acres were planted.
The figure reflects the economic advantage that soybeans has on marginal acres as planting season begins in major soybean areas.
Higher than expected corn acres.
Pretty much the opposite story here - USDA’s estimate of 89.199 million acres would be 1.5 per cent lower than one year ago and the lowest level of corn acres since 2010.
But it is still 460,000 more acres than analysts expected, on average, and was close to the top end of those estimates.
Normal harvest rates and a trend yield of 164 bushels/acre would put the 2015 crop at about 13.312 billion bushels, roughly 900 million smaller than 2014’s record of 14.216 billion bushels.
That level of output, though, would likely keep 2016 stocks at or above the 1.777 billion forecast for this coming fall in USDA’s March WASDE report.
March 1 corn stocks were pegged at 7.740 billion bushels.
That is over 130 million more than analysts had expected. The figure implies sharply lower feed usage during the Dec-Feb quarter — a implication that is hard to buy given the number of hogs on feed and coming to market and the growth of broiler output.
While cattle placements have continued lower, even cattle feedlot inventories are very close to last year’s levels so where are the feed cutbacks?
Dr. Robert Wisner of Iowa State expects this stocks figure to drive a sharply lower feed/residual estimate in next week’s WASDE report. We suppose that it’s the “residual” component that is the culprit.
Soybean stocks on 1 March were estimated slightly lower than expected.
However, they were still over 40 per cent larger than last year’s very low levels.
The lower stocks relative to expectations were supportive of bean and meal futures but suggest that USDA may adjust its residual figure in the soybean balance sheet next week.TheCropSite News Desk