Big Report Day

March 30, 2009 07:00 PM
 

Julianne Johnston Pro Farmer Senior Markets Editor


From Pro Farmer

Updated as of 7:00 a.m. CT

Big report day... It's finally here. USDA will release their much-anticipated Prospective Plantings Report this morning. Traders' read of the data will be very interesting, as the range of expectations is extremely wide heading into this morning's report. As a result, somebody will be surprised by the data this morning, leading to what could be a very volatile day of price action.

Yesterday morning, I highlighted pre-report acreage expectations, so today I've included expectatios for the Quarterly Grain Stocks Report. Per usual, the report will provide the market with key usage data for the last quarter, which was filled with very rocky economic conditions. Traders look for corn and wheat stocks to be higher than year-ago levels, while soybean stocks are seen slightly tighter than year-ago levels.

Grain Stock Expectations

Avg.

Range

Dec. 1, 2008

Mar. 1 2008

in billion bushels

Corn

7.003

6.888-7.146

10.084

6.859

Soybeans

1.322

1.295-1.353

2.276

1.434

Wheat

1.062

0.980-1.113

1.422

0.709

Make sure you check "Leading Edge Reports" for full report details.

Keep your comments coming. Always good to have conversation with you and input on what you'd like to talk about. E-mail your comments/question to me by clicking here. Please include your location.


Opening calls. These calls originate more than three hours before the open -- use caution, things change:

Corn: Steady to 2 cents higher. Futures were steady to firmer overnight. Futures closed marginally to 2 cents lower yesterday. Downside risk throughout the day was limited as traders evened positions ahead of this morning's USDA reports. According to pre-report expectations, traders look for the Prospective Plantings Report to show corn acres at 84.548 million, which would be down from 85.982 million last year. However, the range of guesses is VERY wide -- between 81.4 million and 89 million acres. As a result, somebody will be surprised by USDA's figure.

Soybeans: 6 to 8 cents higher. Futures were firmer overnight. Futures closed sharply lower yesterday on spillover from outside markets. This morning's open will be directed by outside markets, as well as this morning's USDA reports. Traders expect USDA to show soybean acres up around 3.6 million in tomorrow's acreage intentions data. But there is already talk that USDA's initial survey work could be light for soybean acreage if it comes in below expectations, as some spring wheat acres may switch to beans due to flooding in the Red River Valley.

Wheat: Mixed. Futures were mixed overnight. Futures firmed into the close to finish higher at all three exchanges. Late short-covering in the wheat market was spurred on by position squaring ahead of this morning's Prospective Plantings and Quarterly Grain Stocks Reports. Traders anticipate spring wheat planting intentions to come in around 500,000 acres below year-ago. But traders are already talking about the possibility USDA's spring wheat acreage number will be too high as survey work was complete before flooding in the Red River Valley.


Cash cattle expectations: Watching beef market. Boxed beef prices were 41 to 50 cents higher Monday, but movement totaled only 188 loads. Packer demand for cash cattle is expected to be greater this week after limited purchases last week, but the beef market must give packers incentive to raise cash cattle bids in the Plains.

Futures call: Steady to firmer. Futures are expected to find support via short-covering and from expected gains in the U.S. stock market. Futures extended losses into the close to finish $1.10 to $1.50 lower. Nearby contracts led losses. Feeder futures closed 77 cents to $1.25 lower. Much of the pressure in the livestock markets came on spillover from outside markets, as the Dow Jones Industrial Average started the week under stiff pressure on fears related to the auto industry.

Cash hog expectations: Steady. Cash hog bids are expected to be steady at most Midwest locations. Negative cutting margins will keep packers from raising cash hog bids, but cash sources signal most plants are still in need of supplies for late in the week.

Futures call: Steady to firmer. April hogs closed 7 cents higher yesterday, while deferred futures
were slightly to moderately lower. Price action in the lean hog pit was relatively calm to start the week, especially compared to trade in other commodities and outside markets. The fact deferred hog futures didn't pull any support from last Friday's Hogs & Pigs Report, which showed industry contraction, signals traders remain concerned a sluggish economy could negatively impact demand enough to
offset reduced hog supplies.


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