USDA Report Full of Surprises
This March 31st report can be a real market mover and today was no exception. Grain stocks estimates were about as expected but intended planting numbers for corn, soybeans and wheat set us up for a big rally today, especially after the recent downturn in market prices. Lower acreage numbers for corn and especially soybeans at less than 90 million acres were a big surprise to the trade. You don’t have to agree with these numbers, but this is what the market will be trading the next few months and that has to be in the back of your mind as you make marketing decisions. Trading limits on futures contracts increased this month, nearly doubling in most cases. That coupled with the flow of money between markets is sure to make for higher highs and lower lows as time goes on. Crop production in South America continues to influence our markets. All are watching the recently planted Safrinha corn crop in Brazil April is a critical month for moisture supply for that crop to develop. The job of the market the next few months will be to ration demand somewhat while encouraging more acres to be planted. Corn and Beans will be in rationing mode through the next crop cycle or until we see a good crop in the U.S. or the next crop in South America. Supply demand estimates this time of year are usually based on trend line yields. With less acres forecast, weather will be even more important than usual this year all the way from planting to harvest. Demand for vegetable oils is increasing with much of that increase due to fuel use in many countries around the world. Demand may very well outpace supply the next few years, changing the way we look at meal/oil price relationships and how much each contributes to the value of a bushel of soybeans. The Futures market is closed Friday, so Thursday is the last trading day this week.
I hope you all have a Safe and Blessed Easter Holiday.
Feed and Grain Manager