Friday will be one of the busiest report days of the year for the grain markets with several major reports. What’s likely to move the market? Trade guesses indicate only minor adjustments to U.S. balance sheets, so traders will be watching South America crop estimates and, especially, the quarterly grain stocks.
USDA’s Annual Production Summary provides the final crop estimates for corn and soybeans for 2023. However, the trade guesses indicate they aren’t expecting much change.
Chip Nellinger, Blue Reef Agri-Marketing, says: “There’s probably not going to be a huge shock on yield, a touch higher, a tough lower. There’s probably not going to be much of change in acreage — maybe a small tweak here and there. On the demand side, it’s the same, tweaks here and there.”
In terms of South America, analysts say USDA needs to come down on Brazil production due to the drought. They’re above private estimates and nearly 6 million metric tons higher than Conab on soybeans and more than 11 million metric tons higher on corn.
Brian Grete, Editor, Pro Farmer says: “On global production, the South American production numbers, in part Brazil, those are too high from where USDA was in December, but they’re not likely to get down as low as the private estimates.”
The biggest surprise historically has been in the Quarterly Grain Stocks, especially corn stocks.
“It could be a big wild card because of the proportion of on-farm storage verses commercial storage, and we’ve seen a real uptick in the cash corn basis recently,” says Mike Zuzulo, Global Commodity Analytics.
“Quarterly stocks are always a wild card, and it’s impossible to gauge those big misses from low to high. If there’s going to be a shock, it’s likely going to come from the quarterly stocks,” Nellinger adds.
Winter wheat seedings will also be released and are expected to be down from last year.
“Winter wheat acreage is probably going to be down to 800,000 or 1 million acres. Everyone is anticipating that,” Grete says.
Bearish reports have already been priced in, but Grete says with grains struggling to attract buyer interest, bullish data is likely needed to put in market bottoms.
