PODCAST | The USDA released their April WASDE yesterday and we dive right in during the podcast. We think the biggest takeaway was what the USDA had to say about 2018/19 new crop corn exports. The Ag Forum had 2019/19 corn exports at 1.9 billion bushels. I think we could see 2.1 to 2.2 billion in exports and I think the USDA hinted at that in their executive summary section in the April WASDE. Click here to listen to Turner’s Take Podcast The Ag Forum had US corn exports at 1.9 billion for 2018/19 back in February. This was before anyone really knew what the damage was going to be in South America. I think we are going to see US corn exports at 2.1 to 2.2 billion when the USDA releases the May WASDE and we get to see their first supply and demand table for 2018/19 new crop corn. Below I have three scenarios. The first is 87.5mm acres planted with a 170 yield. The second is an 88.5mm acre with a 174 yield. The last is 89.5mm acres with a 178 yield. Moral of the story – we are setting up for some nice potential rallies this spring and summer. We could be trading $3.70 by harvest but I would not rule out weather rallies to $4.25 during the spring and summer. The corn market should offer opportunities to speculators and farmers. SOYBEANS | I sincerely wish I could be more bullish on soybeans but I’m finding it more difficult each day to be bullish. I know soybeans can run higher fast than any other contract in the grain and oilseed complex. However, if we have 89.5mm acres and a trend line yield of 48.5, then carryout stays in the 500mms for another year. It is hard to get bullish when the carrout is that large. I think the market is giving us an opportunity here. At some point beans trade lower if the production is there. Brazil’s crop is getting larger even though Argentina’s is getting smaller. Argentina is buying US beans but that will stop when Brazil harvest beans. Planting issues and weather markets during growing season are going to be selling opportunities. The funds understand their is a single point of failure in the global soybean export market every six months if we do not grow 4+ billion soybeans in the US and then 5+ billion soybeans in South America six months later. Once the market is fairly confident the US will have a decent crop the soybean market could be a $1.00 to a $1.50 lower than where it is right now. WHEAT | Main takeaway with wheat is that every year we plant 46 to 47mm acres of wheat (all US wheat acres) we reduce stocks year-over-year by about 200mm bushels. If this trend keeps up we get to about 600mm bushel carryout by the 2019/20 marketing year. At that kind of carryout we can finally talk about wheat trading in the $5 and $6 area instead of the $3 and $4 handles we have been seeing all too much recently. |

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