The USDA released the January WASDE, Winter Wheat Seedings, and Dec 1 Stocks report today. The big surprise was Hard Red Winter Wheat seeding were lower than expected by 2.5mm acres. The trade was looking for about 29.0mm acres of HRW wheat (KC Wheat) and the USDA projects 26.5mm acres. If projected ending stocks were not so bearish (941mm bushels for All Wheat) we would be limit up. Since the US and the world have an abundant supply of wheat the KC contract is only up 18 cents an hour after the report was released. Soft Winter wheat acres were also lower but not by the amount of Hard Winter wheat. This has led to gains in our KC vs Chicago wheat spread and I think the trend will continue to go in our favor.
WASDE REPORT LINK: http://www.usda.gov/oce/commodity/wasde/latest.pdf
Winter Wheat Seedings: http://usda.mannlib.cornell.edu/usda/current/WintWheaRy/WintWheaRy-01-12-2016.pdf
December 1, 2015 Stocks: http://www.usda.gov/nass/PUBS/TODAYRPT/grst0116.pdf
March KC vs March Chicago Wheat
As for the rest of the report, it came in around as expected. Below are the numbers for US and World ending stocks. I thought the stocks were bullish for soybeans based on expectations but we still have more than adequate soybean US stocks and global stocks. Corn was a little bearish on the US stocks and a little bullish on the global stocks. Wheat was bears for stocks but the acres miss was a much more significant bullish number.
Post-WASDE Outlook: I am going to read this report again and take a look at some of the reports that will come out later today. I’ll have all of my thoughts going forward tomorrow in Turner’s Take Market Alert but at this moment I think Bean and Corn rallies should probably be sold while we need to take a wait and see approach with Wheat. On a first look basis it looks like we will have adequate to burdensome stocks in both soybeans and corn for this year and next year’s crop. I would say the same about Wheat because even though we are losing acres the stocks are still large due to low US export demand, large global stocks, and a strong US Dollar. Stay tuned tomorrow for an update on market outlooks going forward and trade ideas.

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