Market analysts await the release of the World Agricultural Supply and Demand Estimates report.
The monthly report, to be released Thursday, could be a “wildcard.” Two market analysts, featured weekly on the Iowa Agribusiness Radio Network, anticipate a bullish report. Jim McCormick, branch manager of AgMarket.Net, says the bullish reaction to USDA’s recent decision to lower corn ending stocks should carryover into this week’s report.
“The government was using a 2,000,000,445 carry in from last year that’s going to be dropped by about 300 million, so beginning stocks are going to drop down to 2,114,000,000. Everyone is going to ask is, ‘Where’d those bushels go?,” McCormick said. “Maybe the crop’s smaller than what the government was thinking. But more than likely, they’re going to have to raise the feed and residual use, essentially saying we fed more corn that we thought last year, which means they’re going to have show more feed and residual being used this year. We’re thinking this carryout number, which was around 2,190,000,000 last month could drop to 1.6 to 1.7 billion bushels. We’re setting ourselves up for a friendly report due to that revision.”
Brian Grossman, market strategist with Lakefront Futures & Options, seemed a little less confident about a bullish report. However, his yield forecasts seem friendly.
“I’m lowering soybean yield a bit, down to 47 (bushels per acre). Taking the adjustment from the Quarterly Grain Stocks report, I have ending stocks coming (in) at 500 million bushels. That’s a heck of a lot better than the 913 million we had last year. I’m also pulling my corn yield down a bit, to a 166 (bpa). Adjusting for the Quarterly Grain Stocks report, I have ending stocks at 1.77 billion bushels. That’s a healthy number to at least keep a little bit of support in this market,” Grossman said.
We will be in touch with grain market analysts on Thursday, following the report’s release. Their comments will be posted online Thursday afternoon and air on an affiliate station near you on Friday.