Ag News

January WASDE: “More bullish than expected due to corn adjustments”

IARN — U.S. Department of Agriculture (USDA) officials today released the highly anticipated Crop Production and World Agricultural Supply and Demand Estimates reports. Grain futures reacted bullishly, sending corn futures past the five-dollar limit and soybean futures 50 plus cents higher.

“(The) USDA made major changes, specifically on the corn side,” says Greg McBride, commodities broker with Allendale. Those adjustments led to a “more bullish report” than previously anticipated.

“They lowered the 2020 yield by three-point-eight bushels an acre. At the end of the day, that brings your ending stocks, or supply down by 325 million bushels. Couple that with a change  to the ’19/’20 feed and residual number, (and) we lower our beginning stocks by 76 million bushels. We’re down on the total supply by 400 million bushels,” McBride says.

As for soybeans: “The average trade guess was (for) a 140 million bushel carryout, (and) that’s exactly what we got,” says Jim McCormick, branch manager of Ag Market.

“They lowered the bean yield by a half-bushel, and raised exports by 30 million and the crush by five,” McCormick says. “The bean market up 48 cents simply suggests that maybe we haven’t done enough to ration demand and the bulls are having a good day today.”

Both analysts expect prices to hold firm. McCormick recommends selling old crop grain, while McBride encourages producers to assess new crop prices.

“One thing producers have to do in the big picture is reward this market,” McCormick says. “If you have old crop grain, run your revenue numbers. You’re going to be fantastically surprised at these prices.”

“I’ve talked to customers about looking at new crop prices,” McBride says. “It makes sense to make a few sales at these levels. Don’t load the boat too much at this point, but start to layer in some sales.”

Stories courtesy of the Iowa Agribusiness Radio Network

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