The monthly USDA supply and demand was released today at noon. Prior to the report, old corn down was down 1 cent with new corn down 5 cents. Old soybeans were up 8 cents while new soybeans were up 5 cents. Following the report at 12:20 pm, old corn was down 1 cent and new corn was down 3 cents, old soybeans were up 2 cents with new soybeans down 3 cents.
Trader reaction to both the U.S. and world grain numbers had corn as neutral, soybeans were bearish, while wheat was friendly. Ending stocks of new crop soybeans went up 30 million bushels when traders had expected little change.
All week long traders have been paying lots of attention to weather developments this week. The southwest part of the Corn Belt has been the largest area of stress for corn and soybeans. Reports indicate that the driest states are Kansas, Nebraska, Arkansas, Missouri, and South Dakota.
Traders were looking for small declines for old crop corn and soybeans ending stocks. Many have been reaching for insights to crop developments with the huge variance of weather conditions across the Midwest this growing season. Ohio has seen abundant rain the past three weeks. Many producers report both corn and soybean potential to be excellent as ideas of record or near record production abound. Yellowing of soybeans is a big concern with numerous reports of declining conditions across Ohio.
Earlier this week we saw China an active buyer of corn on the price declines.
Much has been talked about with the bearish corn acres numbers from the June 28 acres report. Many continue to shake their heads at the 97 million acres of US corn. The higher than expected acres are still hard to fathom. However, it is important to move forward.
Crop ratings and weather will be the driving forces for grain prices in the weeks ahead. Prices have moved higher this week on the dry conditions in the western part of the Midwest. Plenty of uncertainty will be quite prevalent. Keep in mind that in mid-May the U.S. planted 43% of the corn acres. That means that any kind of prolonged hot weather the next couple of weeks has the potential to affect as much as 41 million acres of corn that will be pollinating during that time.
The price fireworks could be huge or they could be small in the next month. Hot and dry is sexy and exciting for traders and producers. Wet and cool does not garner nearly as much attention.