Markets reacted to the first Crop Production and World Agricultural Supply and Demand Estimates in 60 days by breathing a collective sigh of relief, experts tell the U.S. Farm Report Market Roundtable. The USDA updates were released Friday.
"The corn market actually rallied about 3 cents on a ‘Phew, could have been worse,’" says Bill Biedermann, Allendale, Inc. "But we were 4 cents lower for the week. In soybeans, the carryover came out at 170 million bushels, right on the numbers of what the traders expected. Again, a ‘phew’ kind of a reaction, the market rallied 24 cents, and that’s how it ended up for the week."
Wheat ended the week 12 cents lower on a higher-than-expected carryover number.
"Sixty days of material is a long time to go without, especially in a harvest season," says Bryan Doherty, Stewart-Peterson. "Everybody’s scambling to get some sort of edge or feedback from producers, what this crop looks like. It’s probably really what the report didn’t say. It didn’t have any big surprises of consequence. It did tighten up the corn carryout and reduce the acreage, so that was huge. It seems to have given some stability to the markets, so the question now is, is there going to be a lot to punch corn any lower from here, or are we going to start to stabilize?"
Looking beyond the U.S. to global carryover, it’s clear there is an abundance of starch grains, Biedermann says.
"There’s no reason to get bullish," he notes. "I mean, we could bounce, but we can’t rally."
At the same time, Doherty says, the global situation for grain is positive for the end user. It will create a demand market with more stability.
"You can’t have high prices forever," he says.
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