Feb 21 – Morning Comments

Trade was mostly quiet overnight with all three grains giving up about one cent in the night session.

Yesterday’s USDA acreage estimates met with a bit of skepticism by analysts, as combined acreage for all principal crops was lower.  But, analysts contend that last year’s high prevented planting numbers, combined with an added one million acres coming in from CRP, will lead to crop acreage numbers higher than expected. This morning, USDA also put out supply and demand balance sheet estimates for new-crop 2014/15. Not surprising, USDA has penciled in higher ending stocks in all three grains for the next marketing year as compared to the current year. In corn, assuming a 165 yield and 92 million acres planted, USDA projects ending stocks to reach 2,111 MB next as compared to 1,481 MB this year.  Wheat shows a modest expected increase in stocks from 558 MB this year to 587 MB next year. But, the biggest change is expected on the soybean side. Here, USDA looks for stocks to top out at 285 MB up from 150 MB this year, assuming 2014 acres of 79.5 million and a US average yield of 45.2.


In international news, export tender activity has slowed of late on the recent runup in prices. Asian wheat importers reduced purchases this week as a recent jump in global prices to a two-month top curbed demand from top importers who are looking to cover supplies for May shipments.  Benchmark U.S. wheat futures WH4 climbed to $6.20-3/4 a bushel on Thursday, highest since December. Political unrest has sent the currency there in a free fall which has led farmers to hoard their grain supplies.

This morning’s export sales report was mostly disappointing with wheat and corn coming in at the low end of expectations. Although soybeans beat expectations, it was  solely due to large new-crop sales of 749,000 MT as only 86,300 MT for old-crop. China canceled 145,600 MT of old-crop sales an unknown destinations also canceled 268,500 MT.

WEEKLY EXPORT SALES (in thousand metric tons)

  Actual Expected
Corn 691.4 700-1,250
Soybeans 835.4 150-500
Wheat 491.5 400-700