USDA REPORT TODAY AT 11:00 AM CENTRAL TIME
The USDA will release their most recent supply and demand numbers today, October 10th. Below are trade expectations coming into the report and our bias on the numbers.
|2014/15 Ending Stocks
||Difference (% change)
For corn, the average analyst guess expects production to be increased to 14.506 billion, up 111 million bushels from the September WASDE report. Yield is expected to come in around 174.685 bushels per acre which would be an increase of nearly three bushels per acre from the September report. The higher yield, combined with the larger than expected Sept. 30th quarterly grain stocks numbers which showed 51 million bushels more corn than analysts were expecting should lift the 14/15 carryout by 128 million bushels from last month’s forecast of 2.002 billion bushels.
With continued expectations for increasing yield and ending stocks we believe a lot of traders have been lifting some positions going into this report which would explain the light short covering rally we have been experiencing this week. With expectations for a bearish report, if yield is revised only a bushel per acre higher we could see a bullish reaction in prices. We are currently observing record short positions in the market, and often times when everyone is on one side of the market we see it move sharply against the masses. Although, fundamentally we still have a bearish market outlook, a rally following this report would have negative implications to a lot of farmer’s crop insurance payouts.
U.S. soybean production is expected to increase by 60 million bushels in today’s report, with the trade looking for yield to be bumped to 47.59 bushels per acre. Production for 2014/15 is expected at just under 4 billion bushels. Increases in production are expected to more than compensate for the short September 1st stocks reported in last week’s Quarterly Grains Stocks report. Ending stocks are projected to remain relatively unchanged as a decrease in 2013/14 carryout and increased demand side numbers should chew through added production. The average analyst is looking for 2014/15 ending stocks to be down just 3 million bushels at 472 million bushels. All things told, traders are looking for a relatively neutral soybean report when looking at U.S. ending stocks.
Historically we have not seen soybean prices above $9.00 on the board during years of stocks/use similar to 2014/15. November soybean futures have rallied this week, making puts an affordable pricing option into tomorrow’s report. Our longer term bias is still negative for the soybean market, considering current stock estimates and prices on the board.