By Doug Tenney, Leist Mercantile
Friday’s USDA Prospective Plantings report was negative with corn stocks 325 million bushels above trade estimates. This is still way too early to say this, but you have to wonder if the 2018 corn yield will move higher later this summer.
Corn stocks were 8.6 billion bushels, soybean stocks were 2.72 billion bushels, while wheat stocks were 1.59 billion bushels. Corn acres were 92.8 million acres, soybean acres were 84.6 million acres, and all wheat acres were 45.8 million acres.
Today is all about quarterly grain stocks in the US as of March 1 along with planting intentions for US grains in 2019. Traders will be paying more attention to grain stocks as they gauge demand and disappearance. US acres are in the mix today. They will be noted with a checkmark. Yes, they were released. Traders will easily answer, “Who cares?”
Just ahead of the report, grains were all lower with corn down 3 cents, soybeans down 2 cents, with wheat down 5 cents. Following the report, corn was down 11 cents, soybeans down 4 cents, and wheat down 10 cents.
Early trade estimates have March 1 corn stocks less than last year while acres are expected to be up. The average trade estimate for corns stocks is 8.335 billion bushels. Last year in March corn stocks were 8.892 billion bushels. The average corn acres estimate is 91.3 million acres. Last year US corn acres were 89.1 million acres. To the surprise of no one, soybean stocks are expected to be higher and 2019 soybean acres are expected to be lower. The average soybean stocks estimate is 2.683 billion bushels. Last year in March soybean stocks were 2.109 billion bushels. The average trade estimate for soybean acres is 86.169 million acres. Last March US wheat stocks were 1.495 billion bushels and wheat acres were 47.8 million acres. Wheat stocks were expected to higher than last year with wheat acres lower than last year.
Weather continues to be a huge factor on the minds of producers as they are most anxious to be doing something to mark progress for the corn and soybean planting season. Unfortunately, little fieldwork has taken place across Ohio and the Midwest this month. Soils were wet coming into the month as freezing temperatures the first week of March did allow much of the unharvested corn and soybeans from 2018 to get harvested. The 30 day forecasts suggest more of the same, wet and cold.
Another month is behind us with the US/China trade deal not yet done. US representatives are in China this week. Talks appear to be progressing with little details coming out. Then next week Chinese officials return to the US. All of the talks and where they take place remind one of home and away basketball or baseball games. For US representatives, this week it is an away game. Next week it is a home game as they get to sleep in their own beds. Away, home, rinse, and repeat.
Bottom line the funds hold a record short corn position. At this time they want to see a date announced that the two Presidents will sign a deal and also see the signing take place. Until then, it will take something drastic to move out of that huge short corn position.
Any corn planting delays will not be a factor until mid-May. Last year, US corn planting was nearly record late. The 2018 corn yield was 176.4 bushels. The US record yield took place in 2017 and was 176.6 bushels. The reality is, even with corn planted so late last year, the final yield was within a whisker of matching the record yield.
Expect more choppy markets in the weeks ahead. A US/China trade final trade deal looks to be weeks away, not days away. Earlier this week China bought 1.5 million tons of US soybeans. It was a non-market mover.