Wednesday, July 12, 2017

"Corn, winter wheat drag grains lower, as US supply hopes top expectations" (WASDE)

Symbol Last Chg
Corn 399-6-14-4
Soybeans 1033-6-9-4
Wheat 538-4-14-4

From Agrimoney:
Corn and winter wheat futures led grains lower, undermining resilience in soybean and spring wheat prices, after US officials, in long-awaited crop data, held with their corn yield forecast despite dryness in parts of the Corn Belt.
Corn futures for December plunged 3.9% at one point, falling below $4 a bushel, after the US Department of Agriculture, in its much-watched Wasde briefing, confounded expectations of most investors by sticking by estimates for a strong US yield this year, of 170.7 bushels per acre, despite deteriorating crop condition.
The USDA acknowledged that "during June, harvested-area weighted precipitation for the major corn producing states was below normal".
However, the rainfall shortfall "did not represent an extreme deviation from average", the department said, pegging US corn stocks at the close of 2017-18 at 2.325bn bushels – an upgrade of 215m bushels from last month, and well above market expectations too.
Winter vs spring
Winter wheat futures, meanwhile, for September tumbled by 3.2% in Chicago in initial deals after the Wasde pegged US winter wheat production at 1.32bn bushels, some 70m bushels above investor forecasts.
Wasde corn data, change on previous and (on market forecast)
US yield: 170.7 bushels per acre, unchanged, (+1.1bpa)

US production: 14.255bn bushels, +190m bushels, (+129m bushels)

US stocks, close of 2016-17: 2.370bn bushels, +75m bushels, (+49m bushels)

US stocks, close of 2017-18: 2.325bn bushels, +215m bushels, (144m bushels)

World stocks, close of 2016-17: 227.51m tonnes, +2.94m tonnes, (+1.79m tonnes)

World stocks, close of 2017-18: 200.81m tonnes, +6.48m tonnes, (5.48m tonnes)
Sources: USDA, Reuters
The USDA flagged "both higher harvested acreage and yield".
Eventually, the weakness weighed on Minneapolis-traded spring wheat too, snuffing out a recovery which had seen the September contract return to positive territory, after the USDA pegged the US hard red spring wheat harvest at 385m bushels, well below market expectations of a 416m-bushel figure.
The durum crop estimate too, at 57m bushels, was well beneath market hopes.
"The production forecasts for durum and other spring wheat indicated a significant decline compared to last year for these two classes primarily due to severe drought conditions affecting the northern US Plains," the department said....