News & Commentary
June 13, 2014
Weather for corn production has been fairly ideal. Not too hot, not too cold, just about right. So the little bear has found a nice place to sleep for now. As bear markets go this one is fairly typical. Abundant to ever increasing supplies, demand that isn’t ravenous; nobody overly concerned because the boat seems to be floating through fairly calm waters for now.
USDA is projecting 1.726 billion bushels of corn carryout for the 2014/15 crop year, an increase of
580 million bushels. They also are now projecting a price range of $3.85 to $4.55 per bushel for next year. So now the June 30th stocks and acreage report will be the next potential market mover.
The stocks portion of the report indicates how strong demand has been, the acreage portion indicates how big a potential the growing crop has. Then of course, do the numbers line up with expectations or not? That’s what really moves the markets. When USDA gives us a changeup that we’re not expecting the markets can get a whole lot more exciting.
Although the harvest numbers for HRW wheat in the US keep being disappointing, the market has continued to struggle. Export competition keeps undercutting values in the global markets, not giving our markets a chance to rally. Still there may be some positive that can occur. But USDA pretty much indicated that although US stock are declining World stocks are projected to increase. This creating a more negative reaction than what we’d anticipated from the view out our back door.
However, USDA price projections for wheat prices in 2014/15 are $6.35 to $7.65 which is similar to last year. I would hope that means that eventually we can generate a rally after all the cheap wheat gets sold, but time will tell. Really it’s kind of the same old story. Hope that demand picks up and someone else has crop production issues to give us a boost.
Till Next Time,