USDA Reports Traders' Near-Term Focus

June 26, 2013 01:25 AM
 

What Traders are Talking About:

Overnight highlights: As of 6:15 a.m. CT, corn futures are steady to 3 cents higher, soybeans are mostly 6 to 8 cents lower and wheat futures are mixed with a modest upside bias. With pre-report positioning the focus, choppy trade is likely to continue this morning, though soybeans are expected to maintain a weaker tone. Cattle and hog futures are expected to open with a mixed tone this morning.

 

* Traders see less corn, more soybean plantings. USDA's Acreage Report on Friday will give traders are clearer picture on planted and harvested acreage. Acreage has been a big debate/question mark amid planting delays. The average guesses according to a Dow Jones newswire survey puts planted corn acreage at 95.340 million and soybean plantings at 78.024 million. If realized, that would be a 1.942-million-acre reduction in corn plantings and a 898,000-acre increase in soybean plantings from March intentions.

The long and short of it: Since some planting decisions were not yet made when USDA's survey work was completed, this won't be the final answer on planted acreage. Plus, flooding and poor crop development point to an eventual reduction in harvested acreage from wheat USDA forecasts Friday.

* Don't forget grain stocks. While much of the pre-report hype has been on USDA's acreage data, June 1 grain stocks via the Quarterly Grain Stocks Report can't be overlooked. In fact, that may be the most market-moving data released Friday. The average guesses from the Dow Jones newswire survey put June 1 corn stocks at 2.856 billion bu. That would be down from 5.399 billion bu. on March 1 and 3.148 billion bu. on June 1, 2012. Soybean stocks are guessed at 441 million bu., down from 999 million bu. on March 1 and 667 million bu. last year. Wheat stocks are guessed at 750 million bushels. That would be down from 1.234 billion bu. on March 1, but up from 743 million bu. last year.

The long and short of it: The corn stocks figure is the potential major market-mover as the average guess has consistently missed by around 300 million bu. three years. Odds are corn stocks will again prove to be a shocker, but it's a stab in the dark whether the figure will be bullish or bearish.

* China tries to calm liquidity concerns. Global markets have been on edge since the weekend amid liquidity concerns in China. But the People's Bank of China (PBOC) is trying to calm concerns. PBOC says it has already helped some banks and will assist others with liquidity problems by providing cash for necessary loans. While the Chinese central bank also says it wants to control "shadow" loans and will stick with its tighter policy on risky loans.

The long and short of it: China is a key macro-economically. If Chinese concerns build, it would put more macro-economic pressure on markets, including commodities, and cause investors to reel in risk.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

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