Friday’s quarterly grain stocks and planting intentions reports will set the tone for the market for the next few months. The Bears have been in control, and corn and soybean prices have been under pressure for the past few weeks. Disappointing export numbers on Thursday help put the trade in a definite funk heading into the reports that will be released at Mid-day. Corn acres are expected to be between 90-92MA while soybeans are expected to be between 86-89MA. Grain stocks look to be about 90 million bushels for corn and 88 million bushels for soybeans.
Doug Werling, with Bower Trading, says the market is expecting bearish reports, so, if that is what we get, we could see a move to the up side, “Sort of a sell the rumor and buy the fact scenario.” Werling feels that, if the stocks numbers are less than expected, it might give the bulls something to get excited about, “There is still some good demand out there. Ethanol production is at a record pace, our exports for corn are good, and feed demand here in the U.S. looks good.”
In years past where weather has dictated what actually gets planted, there is sometimes a significant difference between the March estimates and the June planted acreage reports. Mike Silver, with Kokomo grain, told HAT, “In the last 20 years, the March intentions for corn have been higher than the actually planted acreage 8 times and lower 12 times. For soybeans the difference between the March intentions report and the June planted acreage report are equal with 10 times being higher and 10 times lower.” Werling says this year there may not be much of a change, “We would have to see a big jump in corn prices in order for guys to want to switch from soybeans to corn.”
Most traders and analysts agree there is a great deal of uncertainty about this year’s reports and a good deal of market volatility is likely. Price limits for tomorrow are: 25 cents on corn, 30 cents for Kansas City Hard Red Wheat and Chicago Soft Red Winter Wheat, 60 cents on Minneapolis Wheat, and 70 cents on Soybeans.
HAT will have the numbers at mid-day and analysis this afternoon and Monday morning on this web site.