Download Wednesday, June 10, 2015 Corn Soybean Wheat Old Crop (futures

Tuesday, August 01, 2017
Corn
Old Crop (futures month,
Soybean
Wheat
CN5
-.08
$3.57
SN5
-.02
$9.50
WN5
-.18
$5.13
CZ5
-.08
$3.75
SX5
-0.03
$9.22
WN6
-.17
$5.62
change, settle price)
New Crop (futures month,
change, settle price)
It was an active trade day in the commodity markets with corn, wheat, and soybeans all closing in the
red. Volume increased today in part due to active farmer selling, reducing cash risk ahead of the World
Supply and Demand Estimate Report. Numbers out of the report provided few surprises to the trade
but do confirm large US and global grain and soy stocks. Without any major weather concerns, this
confirmation will continue to challenge any market rallies.
The report numbers by commodity. Corn focus should be directed to the world stocks number for 14/15
and 15/16 crop years. At 197.0 and 195.2 million metric tons respectively, both numbers were above
the high end of the trade estimates. These increases resulted primarily from higher South America crop
sizes. Minor adjustments to US corn ending stocks for both crop years were made from a reported
lower corn for ethanol usage. Data for the USDA’s adjustment came from April’s crushing data,
although a future revision could be expected as we have seen a significant increase in ethanol
production since the May 1st low. However, USDA has not made any adjustments for reduced feed
demand following avian influenza.
Soybean balance sheet adjustments were made to 14/15 and 15/16 ending stocks. Ending stocks of 330
million for 14/15 were within the range of trade expectations. 15/16 endings stocks of 475 million was
within the trade range as well. Adjustments resulted from increased crush and export demand. US
crush demand remains strong; cash basis has not been greatly affected by the farm stocks reported in
the last quarterly stocks report being historically large. In fact, processors have been forced to do more
work than expected to source soybeans.
Adjustments to the wheat balance sheet were minor and within trade estimates. World stocks were
reduced slightly for both crop years from the May report but near average trade guess. US all winter
wheat production rose about 33 million bushels from the May report and at 1.505 billion bushels was
above the high end of trade expectations. Soft red winter wheat production was however down slightly
from May’s estimates.
The real highlight continues to be the ample global supplies of all three commodities. Corn, wheat, and
soybean stocks rose nearly 12% year over year in 14/15 from 13/14. Stocks are projected to rise in
15/16 another 2%. AS mentioned, weather is not creating any lasting market incentive presently but
should be watched closely. The present El Nino pattern has a history to produce global weather
extremes, and action in these markets can shift very quickly.
To Michigan growers, be diligent in identifying you price objectives in these markets.