Good morning!
The USDA released their quarterly stocks report this morning:
· Corn - 988 million bushels
o The market expected 1,128mb
o BULLISH
· Soybeans – 169 million bushels
o The market expected 131mb
o BEARISH
I don’t think the market had a good feel for where corn would come out – almost expecting a surprise, maybe even a bearish surprise. This should be pretty bullish corn and corn spreads for the near term. This lower stocks number indicates that demand for corn in the late summer months may have been greater than we thought.
I don’t think anybody expected a surprise in beans, the range of guesses was pretty narrow. With the steady flow of exports and strong processing margins domestically it seems odd that we would find more bushels. But it is what it is and this is bearish beans. Maybe this $2 we took out of the market over the last couple weeks was already factoring that in?
Today expect corn and wheat (the report was bullish wheat as well) to lead the charge higher, dragging soybeans with it. If the corn market decides to pump the brakes at some point and weaken up, soybeans could fall sharply.
The next big piece of fundamental news comes out in early October – the monthly USDA S&D report should have a good handle on crop size alongn with demand projections moving forward for the year.
Currently
Corn is up 17 to 20 cents
Soybeans are mixed, down 2c to up 2c
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