Now that USDA's spoken, concerns turn back to weather
It's like a broken record. For months, everybody's said the weather will be the main factor in the direction of the grain trade.
On Tuesday, after the dust from the morning's big USDA Acreage and Grain Stocks reports had settled, the broken record skipped again.
"I think as we enter the critical growing season, weather is front and center," said Brian Basting of Advance Trading on Tuesday after USDA's numbers were released. "I think in all, we are finding acres we were missing in March, and it brings us into the weather market leading into July 4 weekend."
But, the weather concerns are sharpened by supply and demand numbers for both old and new crop corn and soybeans. Both are subject to shaky buyers and end-users: Soybeans will already be in tight supply, most market-watchers say, underscoring the need for a good bean crop. And now that some are seeing the seeds of recovery in the ethanol industry and a tipping point for survival for livestock producers coming later this year, there's a lot of upside potential for corn demand later this year.
"These livestock folks have been under severe stress in terms of profitability. Perhaps this report, if we can get into the next 60 days, might be able to let them hold on," Basting says.
"Demand is really a very dominant feature in the profile of corn in terms of the demand side of the livestock herd," adds AgResource analyst Greg Wagner.