Weekly Grain Update 6.10.16

While funds have been driving the market higher in recent weeks, today’s market featured the release the latest USDA supply and demand report.

Starting with old crop corn, imports were increased by five million and exports were bumped up by 100 million bushels.   A net reduction of 95 million versus May took carryout to 1.708 billion bushels.  For the new crop, exports were increased 50 million resulting a net reduction of 145 million to 2.008 billion.  The large reduction in old crop stocks should keep the market supported in the near term.

On the bean balance sheet, old crop demand was increased in both the crush and export categories.  Ending stocks dropped a total of 30 million bushels to 370 million for the 2015/16 crop year.  Looking ahead to the new crop, exports were raised slightly, leaving an estimated carryout of 260 million at the end of the 2016/17 marketing year.

Two big factors to keep in mind while evaluating the reports today are acreage and yield.  Because the USDA will be releasing the final planted acreage report on June 30, acreage and yield figures used today were unchanged from the March intentions report.  This leaves open the possibility for lower corn acres and lower corn carryout.  It also provides for higher bean acres, production and carryout in future reports.  Look for the market to trade today’s 2.0 billion corn carryout with a slightly lower tilt for the time being.  Soybeans will likely have a continued higher bias, particularly in the new crop slot, at least until weather concerns and the June 30th report take center stage.

Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

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CHS – Rochester Grain Team
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