Opening Grain Market Comments 6-25-13 - USDA report guesses

Markets are called mixed to better this a.m. behind a firmer overnight session; which seemed to be more of a dead cat bounce after yesterdays pressure.

In the overnight session July corn was up 4 cents, December corn was up a penny, KC wheat was up 2-3 cents, MPLS wheat was up 3, CBOT wheat was up 4, July soybeans up 4, and November soybeans up 7 cents.  At 8:15 outside markets have a US Dollar about unchanged with the cash index at 82.46, crude up 50 cents, gold up 6 bucks, and the stock market looks to start firmer with the DOW futures up about 110 points.

First off the big news is still to come later this week in the form of an updated acre and quarterly stocks report.  Below are the estimates. 

Here is from the Van Trump report as I thought he said it very well

“Looking ahead...its all about Friday's USDA report and the "weather" during the next 45-days. Just remember, it's not always about playing "offense," having a strong "defense" is equally, if not more important.”

Tables also from the Van Trump report
USDA June Acreage Worksheet 

	June #	March #	2012 Final	Ave. Trade Guess	Range Estimates
Corn	???	97.282	97.155	95.313	94.200 - 96.900
Soybeans	???	77.126	77.198	77.933	77.100 - 79.240
All Wheat	???	56.440	55.736	55.902	55.200 - 56.400
Spring W	???	12.701	12.289	12.132	11.700 - 12.700
Durum W	???	1.751	2.123	1.699	1.550 - 1.800

US June Grain Stocks Worksheet

	June #	March 1	June 1, 2012	Ave. Trade Guess	Range Estimates
Corn	???	5.399	3.148	2.845	2.725 - 2.952
Soybeans	???	0.999	0.667	0.442	0.413 - 0.500
Wheat	???	1.234	0.743	0.745	0.718 - 0.781

The thing that stands out to me is the fact that we are expecting 303 million bushels less for corn then a year ago and expecting soybeans 225 million bushels less than a year ago.  Seems aggressive from the trade considering last year’s corn carryout and how and when the rationing happened.  Lots of rationing occurred last summer. 

Don’t get me wrong I think this year’s market is much tighter then last for both corn and soybeans.  But I have to wonder if the USDA will have a different time table as to when we use the product.  Keep in mind last year we had the drought already happening.  We also had the benefit of an early fall harvest.  Doesn’t look to be that way this year. 

If the average trade estimates are correct things could really get interesting for old crop corn and soybeans.

As for the acre side of thing; most think we get some sort of asterisk *.  How the market interprets what the USDA says might be more important then what they actually say.

The other big thing I see out there is the present trend of our crops.  Based on the weekly crop condition report.  The corn crop started off 7% less in the G/E this year compared to last.  But now this year’s crop has 9% more in the G/E then it did last year.  That trend is very important and if it continues it doesn’t spell out higher prices.

That’s about all I have today; I will be out at the Oahe Farm and Ranch show talking on grain marketing at 11:30 central time.