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It would appear that bulls in grain/soybean markets feel inspired by the turnaround around yesterday as we have prices higher across the board this morning. Realistically sans corn, these markets have not extended into higher ground, but it does provide a reminder that we are now much more attentive to positive news, be that concerning production issues or emerging demand, of which both are prevalent.
On the production side, private estimates for both Argentina corn and beans continue to be lowered, and while that has helped bolster the strength this morning, it has reached the point that none of these should be shocking. In his weekly update, Dr. Cordonnier lowered his bean estimate for this nation by another 2 MMT taking it down to 43 MMT and suggested it could go lower yet. It is estimated that 62% of the early planted beans, which represent about 70% of the total production, are currently in the pod filling stage and 16% have reached maturity. There have already been predictions that the crop will eventually drop beneath 40 MMT, and while I do not know if that is realistic or not, seeing that those numbers have already been bantered around, part of that has already been baked into the price range. On the March S/D report, the USDA did lower the estimated production to 47 MMT. Dr. Cordonnier also lowered the corn production estimate, taking it down 1 million to 34 MMT, which compares with the recent estimate by Uncle Sam at 36 MMT.
Over on the demand side, we were greeted with positive news for corn again this morning. 210,000 MT of corn was reported sold to South Korea and this on top of the total of 364,552 MT of corn sales reported yesterday. Keep in mind that sales this morning were optional origin, meaning they may not be sourced from the US, but regardless, it would reinforce the idea that buyers have grown a bit concerned about a reduction in global supply and corn demand has kicked into a higher gear.
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