Soybean Acreage Surprises Trade
Jul 01, 2014
Good Morning! Paul Georgy with early morning comments for July 1, 2014 at 4:30 am CDT.
Grain futures are mostly lower as markets adjust to USDA data.
Now that the June 30th reports are out of the way, traders are calculating how USDA will use this information in next week Friday’s Monthly Supply and Demand Report.
US crops benefited from moisture last week as corn G/E improved by 1% to 75%.
Winter wheat harvest is lagging behind with only 43% complete compared to 48% average.
Soybeans were equal to a previous week with 72% G/E which is a record high condition for this week.
The Quarterly stocks for soybeans on June 1 of 405 million bushel gives USDA some wiggle room to keep this year’s ending stocks at 125 million bushel.
The USDA surprised trade with a record 84.8 million acres planted to soybeans which is 3.3 million acres more than the March estimate. This is an increase of 8.3 million acres from last year. Using trend yield it is likely to have an ending stocks over 400 million bushel for 2014/15.
Corn acres were little changed from March and preliminary projections suggest ending stocks at 1.750 million bushel. Crop conditions and weather conditions will be watched closely until crop is made.
USDA Farm Service Agency North Dakota State Executive Director Aaron Krauter has announced that prevented planting reporting deadlines have been extended this year to coincide with the final acreage reporting date of July 15 due to planting issues caused by North Dakota’s cold, wet spring. "Farmers need to visit their local FSA office before July 15 to report all their crop acreage, including that which has been prevented from planting," Krauter said.
Argentine farmers say they will stockpile soybeans in the second half of the year if the government is unable to cut a deal with debt investors to stave off a new sovereign default.
CME grain markets close early on Thursday July 3 and will not reopen until Monday morning July 7 at 8:30.
Economic reports: Today construction spending at 9:00, tomorrow Factory orders at 9:00 and Thursday, Unemployment at 7:30.
Cattle traders are concerned about the drop in showlist numbers of approximately 39,000 head this week. Packers will be closed on Friday and have reduced hours because of tight fed supplies. Retail fill-in buying should be complete which could pressure product values. Futures are relieving some of the overbought condition while trend is still up. The 20 day moving average crosses at 145.80. Beef values were firm to start the week as choice was up 1.30 and select was up 1.16. The CME Feeder index is 215.25.
Lean hog futures are still reacting to the bullish Hogs and Pigs report. The discount of deferred contracts (Dec on out) should provide support as breeding herd and farrowing estimates were well below trade expectations. Hog slaughter levels are expected to be very light the next several weeks as PEDv numbers should have greatest impact. Pork cutout values are up .54.
Markets as of 4:30 AM CDT
- Jul Corn -3
- Jul Beans +1
- Jul Wheat -2
- Aug Cattle +.57
- Jul Hogs -.37
- Sep Dlr +.04
- Sep S&P -3.75
- Aug Crude +.39
- Aug Gold +5.30
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