Corn, wheat, soybeans look ahead to new-crop data

Grain & Oilseeds Report

Corn: This week of corn trade should stay under pressure until we see what new-crop number the USDA gives on Friday. Bulls can use the already known level of support at 532 to buy short-term this week. Bears will have to allow for some type of bounce before selling aggressively but can confidently take control at least through this week. Weather is still key but might take second place of importance at least until Friday’s report. Planting estimates for Monday ranged between 12% and 20% and came in at 12%…Ryan Ettner

Soybeans: Allendale sees old-crop soybean ending stocks being reduced slightly on Friday’s report, from 125 to 124 million bushels. The USDA will be releasing new-crop estimates for the first time on Friday. The average guess for new-crop ending stocks is 239 million bushels with a wide range of 147 million at the low end and 398 at the high end. We see USDA posting new-crop stocks at 238.

The Bloomberg survey showed that world ending stocks for both old crops soybeans are expected to come in at 62.4 mmt. Last month the USDA put world ending stocks at 62.63 mmt. The average guess for the 2013-14 ending stocks was 67.9 mmt.

On the domestic demand front, the cash market continues to struggle to get farmers to move soybeans. Cargill announced it will be shutting its Lafayette, Ind., soybean processing facility starting mid-month. It is likely this facility will remain closed until new-crop supplies come in. This follows last month’s announcement about closure of its Emporia, Kan., plant. With the cash market continuing to struggle to get beans to move off farm, old-crop beans should find support on price dips. New-crop beans will likely struggle to rally as if the bean planning pace picks up as anticipated…Jim McCormick

Wheat:

  • Wheat export inspections came out at 16.64M bu, which were below the estimates ranging from 23.0-27.0M bu.
  • The wheat complex finished lower on Monday on pressure from a better six- to 10-day forecast and a weaker corn market. The dollar added pressure as well.
  • Dry conditions continue to affect the soil moisture in Southern Russia’s wheat growing area, which could lower production and prevent Russia from increasing new-crop wheat exports as previously estimated. This could continue to bring buyers to the U.S. wheat market.
  • Allendale estimates total U.S. winter wheat production of 1.530M bu, which is larger than average estimates of 1.494M bu. Allendale estimates total U.S. ending stocks of 676M bu, which is slightly higher than the average guess of 658M bu for Friday’s USDA Supply/Demand report. Overall, we may see lower ending stocks from April’s report, but a big global supply of wheat may limit the upside.
  • Spring wheat planting progress seen at 23% versus last year’s pace of 82%.  Wheat Good-to-Excellent conditions are down 1% from last week to 32%.  Wheat could find short-term support due to delayed corn and winter wheat plantings.
  • July Chicago wheat gapped lower overnight and closed near the lows of the session…Alex Bassett
About the Author

Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Jim McCormick is Senior Broker/Manager at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com

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