This analysis looks at the current acreage priced into the market and possible implications for corn prices moving forward.
The USDA finally released a set of highly anticipated reports on Friday. Despite lower ending stock forecasts, the results disappointed and produced a somewhat bearish outlook.
If the USDA releases the reports as scheduled on January 11, they hold implications for forming expectations on corn and soybean prices in 2019.
Uncertainty remains regarding the number of soybeans China may buy from the U.S. in the near term.
The loss of the Chinese market makes U.S. exports dependent on other regions.
In essence, if the current margins continue, we may be at the beginning stages of unwinding the acreage shifts seen over the last decade.
The forthcoming WASDE report appears set to increase ending stocks for the 2018-19 marketing year for both corn and soybeans.
The overall use estimate for the fourth quarter places September 1 corn stocks at 2.020 billion bushels.
The market now anticipates yield reports from the field as harvest commences and the October production forecast.
U.S. soybean exports to China typically reach the lowest levels of the marketing year in the summer and build strength as U.S. harvest progresses.