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Trade Responds to USDA Bullish Data

DES MOINES, Iowa (—The amount of U.S. corn and soybean acres planted in 2015 has fallen, while stocks were at the low end of expectations, according to the USDA Tuesday.

At 11:43 a.m., the CME Group’s Sept. corn futures traded up 15 3/4 cents at $4.07 per bushel, Dec. corn up 15 1/4 cents at $4.17. 

For Aug. soybeans, the futures traded 39 1/2 cents higher at $10.34, Nov. futures up 39 1/2 cents at $10.19. Sept. wheat futures are up 9 1/4 cents at 5.92 3/4.

In its June Planted Acreage Report, the USDA pegged U.S. corn acreage at 88.9 million vs. the trade expectation of 89.3 million and its March estimate of 89.2 million. U.S. soybean plantings have been estimated at 85.1 million acres vs. the average analysts' estimate of 85.2 million and 84.6 million in March. 

The 2015 wheat planted acreage is pegged at 56.1 million acres, compared with the trade’s expected 55.9 million compared with the USDA’s March estimate of 55.4 million.


The USDA’s Quarterly Stocks Report shows stocks as of June 1. 

For corn, the USDA sees U.S. stocks at 4.47 billion bushels vs. the average analysts' estimate of 4.555 billion bushels, compared with the USDA June 1, 2014, stocks estimate at 3.852 billion bushels.

For soybeans, the U.S. June stocks totaled 625 million bushels vs. the trade’s expectation of 670 million bushels and the USDA’s 405 million on June 1, 2014.

The USDA pegged the June 1 U.S.wheat stocks at 753 million bushels vs. the trade’s expectation of 718 million bushels and the June 1, 2014, stocks at 590 million.


Jack Scoville, The PRICE Futures Group senior market analyst, says that the report’s soybean stocks are bullish, planted area not. 


“Corn is bullish. Market flew higher and should hold. Really nothing there for the bear right now, the weather surely has made an impact, and this is reflected in the data for corn. The soybean stocks were whispered in the marketplace. But, even so, today’s report showed a low number and should help support the domestic market, if nothing else.”

Sal Gilbertie, Teucrium Trading Inc., says that today’s report numbers are supportive in that both planted acreage and stocks are down vs. what traders expected, especially in corn and soybeans. 

“The wheat numbers show good plantings and adequate stocks, but these numbers clearly do not reflect the current weather-related issues plaguing farmers right now. It’s simply too wet in the United States and too dry in parts of Canada and the EU/FSU. Overall, prices seem to be reflecting a belief by traders that grain prices may be finding some long-term support, after their two-year price declines coming into the current crop year,” Glibertie says.

Don Roose, U.S. Commodities, says today’s bullish report is combining with the bullishness that was already in the market.

“So, the market is still dialing in weather premium,” Roose says. In addition, corn and soybean balance tables are going to tighten for 2015-16 from whatever we thought they were, due to the smaller acreage and smaller stocks estimates. For soybeans, the balance table will continue to tighten for old crop, also.”

With weather still a concern, the market psychology is that crop sizes are not getting bigger, Roose says.

On stocks, U.S. feed usage for the last quarter jumped higher than previously thought, Roose says.

“We already knew ethanol production and exports because weekly and monthly data account for those two. The stocks are always the fudge factor,” Roose says.

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