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Watch Friday's Supply/Demand Tables

05/09/2014 @ 8:00am

The corn and soybean markets are trapped in the same price range almost every day this week. It is an uncomfortable dance between planting, weather forecasts, and demand concerns. There is also a waiting game until this morning’s USDA report released at 11:00 a.m. CT.

 

The first official winter wheat crop estimate will provide some direction about just how bad the drought is reducing hard red winter supplies. Last year’s crop of 744 million bushels was also hurt by drought. So far this year, widely followed estimates of the Kansas and Oklahoma crops are smaller than last year, raising concerns. Furthermore, the forecasts are not rain-filled.

 

For those of us in the Corn Belt, the supply/demand tables will attract much of the attention. For the 2013-14 crop year, there are still thoughts the USDA could raise both corn and soybean export projections, which would lower carryout. The USDA could also increase the amount of bean imports in order to leave carryout steady. 


The tables for the 2014-15 crop year will be the first since the Outlook Forum in February. Using the planted acres from March 31 and a trend-type yield, the crop size will not be based on any sort of survey. However, the demand pieces of the equation will be interesting. Will total demand continue to increase?  How necessary do trend or above-trend yields become?


Although it is very early, the strong push of planting this week has some guessing we will pass the halfway mark on corn planting. The five-year average is around 58%. Catching up to average might allow the market to breathe, but the reality is that each week’s guess on planting progress has been way too high. 

 

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation. 

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