Today a flood of USDA data came vomiting forth, giving grain geeks a huge sea of numbers to swim through.
Yesterday DTN’s Darin Newsom said the pile of reports today “is like the Super Bowl, March Madness and the Kentucky Derby all rolled into one for fundamental analysts.”
So, now they’re out, what are the analysts saying? Here’s a very quick selection of early comments:
– Crop production totals were well above most analysts’ expectations. “Reports should be viewed as bearish for corn, soybeans and wheat,” said John Sanow, Telvent DTN grains analyst. “But the numbers will be subject to lots of questions.”
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– “US wheat exports YTD are at 500 million bushels, lagging year ago by 190 million,” said Agricharts. “As expected, USDA trimmed exports 50 mbu this morning and raised ending stocks to 976 million bushels. New crop winter wheat acreage was shockingly low, however, and should support July and September futures in particular.”
– “The final report from the U.S. Department of Agriculture on the 2009 corn harvest is one for the record books. Despite poor planting conditions, a cool, wet growing season, and an abysmal harvest that still sees corn standing in fields, American farmers shattered records for both yield per acre and total production,” said the U.S. Renewable Fuels Association. “The unparalleled productivity of America’s farmers continues to amaze even the most skeptical of critics,” said Renewable Fuels Association President Bob Dinneen. “Despite unfavorable weather conditions from start to finish, farmers produced considerably more corn than the food, feed, and fuel markets are demanding. Such gains in productivity undermine any claims that U.S. biofuel production will require new lands in other nations to come into production. There can be no question that American farmers have both the capability and the can-do attitude to feed the world while simultaneously helping reduce our nation’s reliance on imported oil.””
So what are the markets saying about it? September winter wheat futures in Chicago are way down, by more than 30 cents per bushel early Tuesday trading:
How’s that for wrecking wheat’s day? What do hard red spring wheat futures look like in Minneapolis? Down about 30 cents.
How about soybean futures? Down more than 30 cents per bushel. That won’t be good for Winnipeg canola futures.
The low seeded acreage number for winter wheat may be specifically good for the wheat outlook, but huger than expected – by a bunch – soybean and corn production numbers are a bigger deal.
As the day wears on and the market has time to digest the numbers and get beyond the initial gut reaction things may get better, but this is an unhappy situation for our markets so far.
