NEW PODCAST | We just released a new Turner’s Take podcast. We go over our thoughts on the June 2018 WASDE and why we think corn has the best changes of a big rally IF we have a significant weather rally. Please click here to listen to the latest Turner’s Take podcast.
JUNE WASDE | The USDA did not change yields or acres for corn and soybeans. That was expected as the USDA does not make those changes in the June report even though the market has been lower due to the great GD/EX ratings for the past couple of weeks.
The USDA did lower Brazil production 2mm mt and Russia down 4mm mt. World stocks are lower while US demand in increasing. Many of us feel the USDA could be 200mm to 300mm too low on export demand! The only problem is the USDA has not updated yield yet. With GD/EX ratings in the high 70s one has to assume the projected yields will be higher than the 174 trend line. Some think it could be 180. We are way to early in the game right now for that but I could see the USDA going to 177 the next time they update yields.
Keep in mind at a 180 yield and 88mm acres planted, we are most likely under 2.0 billion for new crop carryout. A combination of lower acres, lower global production, and increased exports will be supportive for corn. When you think that corn last year was in the $3.30s and $3.40s in the front month when the crop had 2.4 billion bushel ending stock projection, you have to think corn will not break last year’s lows. For me that means we have a possible low of $3.50 in Dec Corn but we could also go to $4.30 and test the highs if we have a weather market.
The big takeaway is corn has the best potential to the upside this summer IF we have a significant weather scare.
June 2018 WASDE
CORN SUPPLY & DEMAND TABLE
SOYBEANS SUPPLY & DEMAND TABLE
WHEAT SUPPLY & DEMAND TABLE
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