COMMENTARY 3/31/16

The USDA surprised the market today, especially in corn!  Whopping HUGE yc acres came out the highest since 2013 and the second highest on record at 93.6 mill acres.  Neutral Stocks were only slightly higher at 7.808 billion bu.   YSB Acres were 82.2 mill, slightly below the avg guess of 83.1.  Bean stocks were higher at 1.531 and slightly higher than the last year’s 1.327 billion.  All wheat acres were lower at 49.6 vs the avg guess of 51.7 and 54.6 last year.

Rain continues and temps to be cooler than not through April 10th for the Corn Belt and the Delta. The S Plains should benefit from some this much needed moisture, while the N and NE are expecting some temps in the 20’s and lake effect snow.  In SA, a dry spell in Brazil’s winter corn area is being watched.  Below normal rainfall seems in store for N Brazil for the next 10 – 14 days.  Widespread rain still slowing harvest for Argentina.  They should be especially through the weekend.

St Louis river level ~RISING @  ~ at 18.6′ and forecast 19.4′ by 4/5.

 CORN

DOWN 16

The bears took the market today!  Acres came out the highest since 2013 and the second highest on record at 93.6 mill acres.  This was in an 89.0-91.0 range and compares to 89.2 last year.  Stocks were 7.808 in a range of 7.699 – 8.100 and compares to an avg guess of 7.798.  Assuming there will be little change in crop size, the 2nd quarter use is up 6 million from last year at 1.447 bill.  Acres increased in KS and MO,  up 650 K each, SD up 300 K and ND 650 K higher. IA and IL  saw increases of 400 K,  IN up 250 K and OH was unchanged. Though the yc acres are huge,  the corn/bean ratio continues to strengthen as beans fight for acres.  If nothing threatens this yc crop, it could be on its way beyond a 14.0 bill bu crop.

On a positive note, it’s cool, damp, most NH3 is on ahead of schedule in this local, and…..it is VERY early.  Market scenarios can change fast (it only took 10 days in 2012) and tomorrow is just April first.  Thursday’s Export Sales report was in line with expectations at 31.1 mill bu for the week vs expectations of 31 – 39 and only 18.9 needed per week to keep up with the USDA’s est.

 

BEANS     

UP 2

A neutral report but that didn’t stop basis from eroding.  YSB Acres were 82.2 mill, slightly below the avg guess of 83.1.  Beans likely took a few acres from that of wheat, and potentially some milo in the South.  Stocks were higher at 1.531 in a range of 1.425-1.625 and slightly higher than the last year’s 1.327 billion. Second quarter usage is 21 million and compares with a – 19 mill last year.   Export Sales were slightly lower than expected at 10.0 mill bu vs expectations of 11 – 22 and only 3.5 needed per week.

 

WHEAT          

UP 8

Supportive.  All wheat acres were lower at 49.6 vs the avg guess of 51.7 and 54.6 last year.  The expected range for all acres was 50.5 -54.6.  Winter wheat by itself was 36.2 vs last year at 39.5.  All wheat stocks were 1.372 billion bu vs the avg est of 1.354 and a range of 1.325 – 1.415 and compares to 1.140 last March. Export Sales were decent at 11.7 vs expectations of 6 – 13 mill bu for the week and 8.8 needed.   Some HRW agronomists are finding damage from the recent freeze worse than initially.  Moisture, temp, and conditions going forward are key to the final crop quality size.