Corn finally found a small bounce today which could have been partially due to cold temps seen over the weekend, but also likely had something to do with the FSA releasing a new estimate tomorrow. While the FSA number is destined to move closer to the USDA number, the August number was so low that tomorrow’s number could still be seen as short term bullish. These early FSA estimates are known for being far from what their final number ends up being, so let’s take tomorrow’s number with the appropriate grain of salt. While this FSA number could continue light support it will be facing some large early harvest numbers this week.
- Look for the FSA to come in with a number to offer a little more support tomorrow morning
- Rains could push back some early yield reports until next week for the Midwest, this can slow sellers short term
- Right now the best support should still come from a lack of sellers, today’s bounce was only light short covering
- Trade went a long way to point out this early FSA estimate should not be heavily considered
- Today’s bounce was mainly light short covering which should still appear to bears as a good opportunity for selling a bounce
- Both rainfall and temps look to improve this week after today’s rains move out, early yield reports might be delayed but should start to come in soon
The bean market began the week on a volatile note to begin the week’s trade. The overnight session opened weaker as some of the frost premium that was put into the market Friday was taken out. The weekend’s cold snap didn’t have a major impact on this year’s crop as many Northern Border States saw a mid-30s frost but no killing freeze Saturday morning. We have had reports of a few locations that were hit with some temps cold enough to freeze the crop but these areas seem to be isolated and we think these losses will have minimal impact on the nation numbers.
Today’s NOPA crush was pretty much a nonevent as it represents old crop beans and does have much of an impact on the new crop story. The actual August crush of 110.633 million bushels was just under the average guess of 111.636. This was 0.1% over last year in the same month. For the old crop year, Sep 2013 – Aug 2014 the NOPA numbers total 1.652 billion. With about 79 million bushels from the non-NOPA crushers we estimate the year at 1.730 billion. That is right on USDA’s latest estimate.
In other news today that gave the market a boost, traders were talking about how they expect the Chinese buying delegation to sign purchase documents with the US Soybean Export Council today. This is a signing ceremony for the purchases that were announced Thursday, Friday, and today. The trade should not get excited as this is a regular annual visit but some no doubt will try to spin the news as bullish. This procurement is simply a head start on the 29 million tonnes that we see China buying this year.
In news out of South America Analysis firm, Safras e Mercado, on Friday estimated the Spring 2015 harvest at 95.9 million tonnes. This is the largest estimate we have heard yet. USDA’s latest is a 94 mt estimate, still much larger than the 87.5 mt it suggests from this past year’s harvest.
The FSA will be releasing their updated numbers tomorrow morning. The trade will be trying to use these numbers to determine if the NASS will be making adjustments to the planted acres on upcoming reports. The data is incomplete as they have until the end of the year to collect all the data from producers but market bulls will no doubt try to spin the report friendly. With the early yields results we have been seeing losing some acres this year shouldn’t have a big impact IF the NASS would make acreage adjustments. Traditionally there is about a 1.5 million difference between the FSA numbers and the final NASS numbers.
Weekly inspections came in at 255,020 which as within the trades expected range of 150,000 to 275,000 tonnes. Allendale continues to look for beans to fall to the $9.35 area when the fall low is scored and would recommend not chasing rallies. Producers should continue to sell into price rallies if they occur.