It is Monday morning with a little over 24 hours ahead of the May supply/demand and crop estimates and we have a generally mixed bag of prices this morning that have not ventured very far from unchanged. Grains are generally lower with beans higher. I have seen some suggestion that the beans are strong due to the fact that China cut key interest rates .25% over the weekend and while there could be some that have bought in response to that news, it would seem counterintuitive. This is the third time in the last six months that China has lower rates in an effort to stimulate their economy and as such it would be difficult make much of a case for increased demand or a strong currency.
Rains have covered a large swath through the middle of the country with excessive amount in the far north and far south, particularly Texas. Included within that was flooding and tornadoes and snow. The outlook for the balance of the week appears to promise off and on moisture which should slow the planting pace but if this afternoon’s reports come in close to trade estimates, I cannot imagine the market will be overly concerned. From what I can gather the expectations are for corn to be around 75% planted and beans 25%. Even if that were not the case, traditionally it has been challenging to catch a market rally on too much moisture in the spring/summer as the mentality of rain makes grain will always prevail.
Looking ahead to tomorrow, the most recent trade estimates I have seen break down as follows; 2014/15 ending stocks, corn 1.864 billion ( 37 mil), beans 360 million (-10 mil) and wheat 693 million ( 9 mil). Winter wheat production of 1.47 billion bushels broken down by 845 million HRW, 420 million SRW and 205 million white. Total 2015/16 wheat production is estimated to come in at 2.098 billion. The average estimates for the 2015/16 corn and bean crops are 13.58 billion and 3.829 billion. Projected ending stocks estimates for this next crop year are 1.687 billion for corn, 430 million beans and 763 million wheat. Generally, you would not expect to see much reaction from the May reports but there is always the risk for an element of surprise, especially when there is little else to talk about.You would have to dig pretty hard and use your imagination to find much positive in any of this news this morning. That said, we need to keep in perspective that it is still only the 11th of May and we have funds leaning heavily short in wheat and corn and to a lessor extent but short in beans as well. Surprises should tend to create a bigger reaction to the positive side.