Afternoon Market Wrapup
Mar 10, 2014
Government reports are often anti-climatic and today turned out to be no exception. As expected both corn and bean ending stocks estimates were reduced with corn down 25 million bushels to 1.456 billion and beans reduced 5 million to 145 million while wheat was left unchanged. Note that the reduction in corn came via exports while for beans, exports were boosted 20 million but imports were raised 5 and crush cut 10 to arrive at the net 5 million lower. As I have commented previously, I find it interesting that the trade seems intent to hang on every report that is issued by the USDA while traditionally the February and March supply/demand reports generally do not offer much new, at least for the domestic scene.
That said, this report did not change much on the World scene either. World wheat ending stocks were bumped up a mere 80k MT, corn ending stocks were actually raised 1.17 MMT and world Soybean stocks were lowered 2.37 MMT. For the South American estimates, the Argentine crops were left unchanged at 24 MMT for corn and 54 MMT for beans and Brazilian corn production was left unchanged at 70 MMT and beans lower 1.5 MMT to 88.50.
For the week ending March 6th, we exported 36.8 million bushels of corn, bringing the year to date total up to 745.9 million bushels. We moved 15.8 million bushels of wheat with the total now standing at 895.17 million and for beans, another 39.7 million. This brings the year to date tally for beans up to 1.395 billion bushels so even with the revised projection of 1.53 billion, we only need to export 5.4 million per week moving forward.
With nothing earth shattering in the reports and the situation in Ukraine tense but not really interrupting anything in the grain trade the path of least resistance was to the downside and that is where we headed. Of course the Chinese running away from the market and doing everything possible to push back/cancel purchases did not help either. Without another black swan taking off, I suspect this sets us up for defensive corrective action between now and the quarterly grain stocks and prospective planting numbers to be released on the 31st.