By Doug Tenney, Leist Mercantile
Corn locked up the 25 cent limit.
The report was bullish for both corn and soybeans.
U.S. acres numbers for today: corn 91.44 million acres, soybean 87.6 million acres, and all wheat 46.35 million acres. U.S. grain stocks are: corn 7.701 billion bushels, soybean stocks 1.564 billion bushels, and wheat stocks 1.314 billion bushels.
Watch the acres total for corn and soybeans. Early estimates had that total at 182-183 million acres. A number above that total will be difficult to actually achieve. Last year it was 173.9 million acres.
The corn and soybean price declines of the past two weeks has the potential to see this report set the stage differently compared to past March 31 reports. Some suggest neutral reports could yield price gains today. That is not normal.
Just after the noon report release, corn was up 25 cents, soybeans up 60 cents, and wheat up 13 cents. Prior to the reports, corn was down 2 cents, soybeans up 13 cents, and wheat down 6 cents.
Welcome to USDA, “roll the dice day.” This report day has a long history of being very volatile. The roller coaster ride for grain prices in the first 30 minutes following the report release, could easily be violent. Many refer to this USDA report day as the most important report day of the entire year. If corn and soybean numbers are bearish, end user pricing could cushion the negative news.
Trader average estimates ahead of the report today had US corn at 93.2 million acres, soybeans at 90.0 million acres and all wheat at 45 million acres. Last year, U.S. corn was 90.8 million acres, soybeans 83.0 million acres, with all wheat at 44.34 million acres.
Average trade estimates for corn stocks are 7.767 billion bushels. The range of estimates is 7.573 to 7.980 billion bushels. If that number exceeds 7.8 billion bushels, it likely means USDA did not count all bushels in transit when they compiled the Dec. 1, 2020 stocks report.
Average trade estimates for soybean stocks are 1.543 billion bushels. The range of estimates is 1.440 to 1.825 billion bushels.
Average trade estimates for wheat stocks are 1.272 billion bushels. The range of estimates is 1.227 to 1.405 billion bushels.
Today is month end as well as the end of the quarter.
If you are expecting the reports today to show updated supply and demand tables for exports and ending stocks for corn, soybeans, and wheat, you are in the wrong pew nine days early. The next WASDE or supply and demand report will be on Friday, April 9.
The reports today are U.S. Quarterly Grains Stocks and U.S. Prospective Plantings. Hang on to your seats. Don’t be surprised if the range for corn could be 10 cents while the range for soybeans could be 20-30 cents in the first 10 minutes following the two reports released at noon eastern time.
Why so much price change in a short time period? The funds are known to read the headlines and react to words and numbers in USDA reports. One number could be bullish, with buy orders executed, which pushes prices higher. Yet, another set of numbers triggers selling within the same commodity. That one, two combination is why daily ranges today can easily exceed daily ranges seen the past month.
It is no surprise both 2021 corn and soybean acres are expected to exceed those of last year. Tight world stocks, especially for soybeans require more acres to meet world demand. For that April 9 report, many are expecting USDA to increase corn exports and lower corn ending stocks due largely to the 4 million tons or 157 million bushels of US corn China bought two weeks ago
Keep in mind USDA has a propensity to “lose and find bushels” with the quarterly grain stocks report. The big unknown can often be bushels in transit and when they get counted. Some are expecting USDA to “find” corn bushels with this report. This stems from the notion that the last quarterly grains stocks as of Dec. 1, corn bushels were too low due to all bushels in transit may not have been counted. Both corn and soybeans have seen numerous weeks of huge weekly export loadings since last fall. For example, last week corn exports were 77.2 million bushels.
Traders have been reducing their long corn and soybean positions the last two weeks with huge selling yesterday. Various factors included: improved world weather conditions, sharp declines for world vegetable oil price which erased huge increases seen earlier this month, U.S. April weather expected to be normal, and several spikes in the U.S. coronavirus number of cases, as well as spikes taking place in Europe.
Keep in mind grains will not trade this Friday, April 2 with the Good Friday holiday. Starting next week with Monday, April 5, NASS will resume their Monday weekly crop progress numbers. Corn planting is already underway in Texas, Louisiana, Mississippi, and Arkansas. Corn planting progress numbers will come early in April while soybean planting progress likely won’t be shown until the third week of April.
Have a great Easter with your families this weekend!