Today's USDA report was pretty positive for corn and carried no market-influencing news for soybeans or wheat, says Justin Kelly, president of EHedger. "USDA raised ethanol demand 155 million bushels for the 2009 crop and 100 million for the 2010 crop,” he says. This may partially be driven by plants needing to use more bushels to extract the same amount of fuel due to light test weights, as many expected, he notes.
"Old-crop ending stocks were 120 million below average trade estimates at 1.63 billion, and fell further for 2010 at 1.57 billion. That was 260 million below trade expectations,” he notes. World ending stocks fell 7 million metric tons.
"On the other hand, we are hearing about cheap feed wheat coming on the market,” he cautions. "Kansas City wheat is selling as low as $3/bu. as the western crop is coming in from the field.”
Corn at $3.80 is a price farmers should take advantage of, Kelly says.
Soybean stocks are 1 million bushels above average estimates. "USDA raised crush 5 million, but Census reports of crush have been running below the pace needed to make USDA's expected numbers—so we could see a downward revision later,” Kelly says. "There are plenty of beans in the world. I think farmers should take advantage of $9.50 beans when available unless weather dictates otherwise.”
The wheat market got little news and there is no reason to be bullish.
Listen to Kelly's full commentary: