Commentary
Wednesday at 11am Central will be our next supply demand report from USDA. The WASDE numbers will be the first release and feature their first ending stocks estimates since the June 30th quarterly report. While we have no idea how the USDA will come up with their ending stocks figures and what those might be on Wednesday, weather forecasts will be the main driver for the next six to seven weeks. The average ending stocks guess for beans now is 199 million bushels vs 350 last month. This is a direct result of 4 million planted acres less by the USDA. Beans therefore can’t have a weather hiccup in my view. However, the average trade guess for corn has ending stocks raised 1 million bushels from 2.25 billion last month to 2.26 billion this month. Corn acres were raided 2 million acres sucking any weather premium in June from the market in my opinion. Range of estimates are wide for both. What we do know is that USDA will incorporate the June 30 grain stocks numbers into its crop balance sheets. USDA is expected to make notable changes to its ‘23-‘24 corn and soybean balance sheets after the shocking acreage changes. We could see some fireworks into Wednesday’s report, and I wouldn’t be surprised if beans were bid up into the report, as fears of a tighter carry may not be fully priced in the market at this juncture. There’s an old saying corn is made in July and beans are made in August. I think that will prove true this year. So far, we are receiving rains that have bailed many areas out and arrived just in the nick of time for others. Remember it is never the same everywhere regarding rainfall Demand for both new crop corn and beans has disappointed so far, but its early and that can change. Weather patterns are still showing we are in a strong El Nino, which represents a milder and wet summer for most of the Midwest. That should put Corn on the defensive because unlike beans, corn acres were raised 2 million, which offset the weather premium that was starting to build in the first 3 weeks of June.
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