Current Marketing Thoughts
Kevin Van Trump
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
WASDE: What Producers Need to Know
Aug 10, 2012
I wanted to bring you the highlights of this morning's WASDE report. I know there's so much information given in these reports that it can be overwhelming. That's why I wanted to just hit the major highlights in an easy to understand and un-intimidating fashion. Here they are:
- Corn yield reported at 123.4, trade was looking for a 127 yield
- Corn harvested acres reported at 87.361 million, trade was looking 86.5 million
- Total Corn Production reported at 10.7, trade was looking for 11.025 billion
- Ethanol Usage dropped by 400 million to 4.5 billion bushels.
- Corn Exports dropped by 300 million to 1.3 billion
- Corn ending stocks cut from 1.183 billion in 12/13 down to 650. The trade was looking for a number closer to 660 million
- Old crop corn ending stocks went from 903 million last month to 1.021 billion. Trade was suspecting a slight jump higher so no real affect.
- Chinese corn production now estimated at 200 million compared to last month's 195 million and last year's 192.78 million. What a joke... They also lowered their corn imports to 2 million metric tons down from 5 million.
- Ukraine corn production reported at 21 million compared to last month's estimate of 24 million metric tons. Market was hoping for 20 million
- Soybean yield reported at 36.1 compared to 40.5 in July and 43.9 in June
- Total Soybean production reported at 2.692. The trade was looking for a number down around 2.81 billion.
- Soybean ending stocks estimated at 115 for 2012/13, this compares to an estimate of 130 last month. Trade was looking for a number around 111
- Old crop soy ending stocks reported at 145 compared to the 170 million estimated last month.
- Winter wheat production reported at 1.012 compared to 1.670 in July. Trade was looking for a number around 1.668
- Russian wheat production reported at 43 million tons this compares to last month's estimate of 49 million and June's estimate of 53 million. The trade was looking for a cut to 43 million.
With the USDA report now behind us and the "weather" story starting to become old news, I have to believe the trade will start to focus more heavily on "demand." From my perspective, once the South American corn supplies dry up and the world no longer has access to "cheap" corn supplies we should post another leg higher. I believe the US crop is going to continue to get smaller and the world is going to be left with very few alternatives. I personally doubt the Chinese will harvest the numbers currently being thrown around, and I believe there is more to their corn shortage story than we know.
To hear my thoughts on how producers should be marketing in response to the WASDE number, continue to watch AgWeb.com for more of my updates. If you would like more in-depth marketing help, you can sign-up here to receive a FREE, NO-RISK trial of my Daily Grain and Livestock commentary in which you will see where I stand on cash sales and some strategies on how you can take advantage of "Money-Flow" and the Outside Markets. Just click here - Van Trump Report