Compared to May WASDE reports in recent years, Tuesday’s USDA release delivered a booster shot to demand and crop prices, sending soybean futures up more than 50 cents.
“This is probably the best news you could get from a fundamental standpoint,” said Jerry Gulke, president of the Gulke Group, speaking to Farm Journal Radio’s Pam Fretwell. “This is exciting when you get this in May. This is contrary to what happened to what happened in the last two or three years, and it caught a lot of people off guard.”
That certainly happened in soybeans, where the trade expected to see a 405 million bu. to even 550 million bu. carryover for new-crop beans. USDA’s forecast released today? 305 million bu., which caused soybean futures to soar.
“That’s the biggest one-month drop in carryover I’ve seen this early in the year, and we haven’t even gotten the crop planted or even any sort of a weather problem coming in,” Gulke said.
What’s going on? USDA is trimmed its soybean yields to 46.7 bu. per acre and incorporated the March 31 Prospective Planting acreage intentions into the May report, slicing the 2016/17 ending stocks estimates with still plenty of uncertainty to come from weather and more.
“This reaction of near 60 cents a bushel in beans was warranted,” said Gulke.
Listen to his full comments on the May 10 WASDE reports and the market’s reaction here:
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