Home Indiana Agriculture News Market Gets the Bullish Bump it wanted from USDA

Market Gets the Bullish Bump it wanted from USDA

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Logan_Burgess_Grain_Hedge(1)USDA is projecting larger crops in the United States this year but not as large as trade analysts expected from the agency. So following the release markets surged. That meant higher prices for corn and wheat futures, but the soybean market was already enjoying a strong day at the time of the noon Eastern Time release.

“We did get some export sales out and those were pretty sizable,” said Logan Burgess, an analyst and broker with Grain Hedge. “We saw 713 thousand tons sold to China for new crop beans, so certainly the Chinese are very savvy marketers themselves and I think they looked at this report and saw that it had real potential for a bullish surprise. Maybe they wanted to get in there and get beans at a little bit of a depressed  rate right now.”

He told HAT both corn and soybean ending stocks figures from USDA supported the surge higher.

“When we jump into the corn numbers in particular we did see USDA lowered their expected production for the upcoming crop by 187 million bushels. Expected production is now sitting at 13.76 billion, and keep in mind, coming into this report a lot of people were actually looking for a larger production number, maybe even a number approaching 14 billion bushels. We certainly didn’t get that and really driving that lower production number was the yield number where we saw USDA take about 2.1 bushels per acre off their projected yield number.”

And soybean yield was adjusted lower in the government report by 1.9 bushels per acre.

“In total we saw production lowered by 165 million bushels, so same thing with corn at about 100 million bushels lower than what the trade was expecting. I certainly think that would continue to support price moving forward.

Listen to the complete rundown from Logan Burgess: