Friday’s USDA planting intentions and quarterly stocks reports have the market in a very bearish frame of mind. Doug Werling, with Bower Trading, said, “The market has built in a great deal of negativity, especially in the soybean market.”
While the acreage numbers will get the headlines, Werling said the stocks number may actually be what turns out to be the market mover. “This past week we say the market dominated by no real new news,” he stated. “Traders are focused on supply rhetoric and feel we have plenty of grain out there. Yet, what I want to say is the demand picture has not changed either.” He noted that ethanol demand remains good, export demand is “phenomenal” and the feed sector in the U.S. is doing very well. “The thinking that we are doing to have this big stocks number, I am a little skeptical on that,” said Werling.
Typically, there is a difference between the intentions report and the actual planted acreage number we get in the June report. But Werling says this year there may not be much difference between the two reports, “The more I talk with producers across the country, the more I hear that they have already committed to planting more soybeans this year. But they have been more aggressive in marketing those soybeans. So to get any switching back to corn, we are going to have to get a really big price increase in corn.”
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