Bullish surprise did not happen

By Doug Tenney, Leist Mercantile

The report was negative for corn and neutral for soybeans.

Traders were expecting lots of changes with this report, which included U.S. corn and U.S. soybean ending stocks, U.S. corn and U.S. soybean exports, as well as corn and soybean production numbers in South America. World ending stocks will also be closely watched.

However, from an historical perspective, the February WASDE often yields few changes.

Corn ending stocks were 1.502 billion bushels, last month was 1.552 billion bushels. Soybean ending stocks were 120 million bushels, last month was 140 million bushels. Wheat ending stocks were 836 million bushels, last month at 836 million bushels. Soybean crush was unchanged with exports up 20 million bushels. Corn exports were up 50 million bushels and ethanol was unchanged.  

Brazil soybean production was 133 million tons, last month was 133 million tons. Argentina soybean production was 48 million tons, last month was 48 million tons. 

The average trade estimate for U.S. grains ending stocks were: Corn 1.392 billion bushels, soybeans 123 million bushels, wheat 834 million bushels.

Shortly after the report was released, corn was down 5 cents, soybeans up 7 cents, and wheat   down 2 cents. Just before the report release, corn was up 4 cents, soybeans up 17 cents, and wheat up 1 cent.  

The last USDA monthly report was on Jan. 12. March CBOT corn on that day closed at $5.17 ¼, up the 25 cent daily limit as corn production was lowered to the surprise of many. Just a month earlier with the Dec. 10 report, corn closed at $4.21 ¼, down 2 ½ cents. March CBOT soybeans with the January 10 WASDE report closed at $14.18 ¼, up 45 ¾ cents. On the Dec. 10 WASDE report, March CBOT soybeans were $11.58 ¾, down 4 ¾ cents. In summary, corn was up 96 cents with the January report, soybeans were up $2.59 in that same span of just one month.

Demand rationing for soybeans and corn has been the main function for the market to accomplish since last fall. When exports continue to climb higher and the monthly soybean crush is setting several new records in the past six months, rationing is not yet taking place.

The Brazil soybean harvest is expected to pick up dramatic speed in the next 10 days. Boats are lined up at Brazil ports to load at least six million tons of soybeans. Harvest pace and weather for the next 30 days will be major factors for the speed of loading activity. Harvest delays in Brazil are expected as some areas are still too wet for field activity. Argentina continues to experience areas of dryness.

In the weeks ahead, U.S. weather will become a feature as the market will focus more on 2021 fall corn and fall soybean prices along with the acres mix for both in 2021.

USDA’s annual Agricultural Outlook Forum will take place Feb. 18 and 19.

Farm analogy for the day. “It’s your calf, you lick it clean.”

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