Play Turner’s Take Ag Marketing Podcast Episode 279
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The acres report and quarterly stocks report is next week, June 30th, at 11 am central. Expectations are high for gains in both corn and soybean acres. Quarterly stocks can also be a huge wild card this time of year for old crop corn. Weather has been getting better for the Midwest but we are still in the midst of a strong grain demand market. We go over all of these aspects of the grain markets and how we want to position ourselves going into the big report next week. Make sure you take a listen to this week’s Turner’s Take Podcast!
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June 30th Report Estimates
The CBOT has been selling off due to weaker cash prices, better Midwest weather, and the expectations of increased corn and soybean acres. The Acreage and Quarterly Stocks reports will be released Wednesday, June 30th, at 11am central. Traders have been reducing risk into the report due to the uncertainty that surrounds expected acres.
On March 31st the Perspective Plantings report has 91.114mm corn. The trade is looking for a 2.6mm increase. Some analysts this the acres could be 95mm while no one thinks it is lower than 92. Quarterly stocks are always a wildcard for corn. When it comes to tracking stocks and demand, the trade does a good job understanding the export and ethanol usage. Feed is another animal all together. This is where the market can really get expectations wrong since we are only updated on this figure once every three months.
Here is something to think about next week. 94mm acres and a trend line yield put ending stocks close to 2 billion and prices towards $4 at harvest. 92mm acres and a 174 yield puts ending stocks closer to 1.1 billion and corn goes back to trading in the $6s and $7s.
The March 31st report pegged soybean acres at 87.6mm. Teh trade is looking for almost 89mm. The high estimates are 90.4 and the low is 87.9. For every million acres of soybeans we add to new crop, production increases by 50mm bushels. A 2mm acre increase could put new crop soybean ending stocks around 250mm. That is tight but suggest soybeans trade in the $10 to $12 range. If we don’t get the increased acres or yields are lower this summer, we could see soybeans go back to trading in the $12to $15 range.
The Big Takeaway
Traders are reducing risk into a highly unpredictable report next week. I suggest you all do too. There is no reason to be naked short options into this report. If you have have futures positions then make sure you have a long option for protection. Don’t get heavy into this report on Wednesday!
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Acreage Report Estimates – Reuters
Quarterly Stocks Report Estimates – Reuters
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Turner’s Take Newsletter & Podcast - Turner’s Take is a complimentary weekly market commentary newsletter that covers the Grain, Livestock and Energy futures spread markets using fundamental, technical and seasonal analysis.
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