“The market has been preparing for this report for more than a week,” said Bob Utterback, with Utterback Marketing. The market has a history of a dramatic reaction to the January report which presents the final production, yield, and acreage numbers for the 2014 US corn and soybean crop. Utterback and other analysts are looking for a slightly bullish report with some cuts in yield and/or acreage. “But, personally, I think this report will be a non-event,” he said.
Market analyst Christopher Narayanan said, in a research note, that he expects corn production to slip slightly to 14.265 billion bushels. He also expects ending inventories for corn to shrink, thanks to high demand for ethanol. Dan Hueber says his pre-report estimates look like this, “Corn production at 14.54 billion with a yield of 175.4 and carryout of 2.12 billion. We are looking for a December 1st stocks figure of 11.54 billion. In beans, we are estimating a crop of 3.986 billion using a yield of 47.65 and projected carryout of 413 million. December 1st stocks of 2.625 billion. For wheat, we are estimating a carryout of 665 and are looking for all wheat acreage at 42.75.”
Utterback told HAT that, after the report, the market will focus on crop conditions and production in South America. He sees a range bound trade for the next several weeks, “I don’t see July corn falling below $4.00 or getting much higher than $4.50. But I am more bearish about soybeans both long term and short term. I think it will be hard to get soybeans above $10.50.” Jim Riley, with Riley Trading, warns that producers should not react to the first move the market makes after the report. He suggests letting the market chew on the numbers awhile and see if the direction changes.
The USDA numbers and reaction will be on-line at hoosieragtoday.com.