By Carrie Muehling
BLOOMINGTON – Soybean markets responded to last Friday’s USDA reports with lower prices, even though the numbers released were close to expectations.
USDA decreased soybean ending stocks by 10 million bushels, while corn ending stocks were up by 30 million bushels. South American weather continues to be a factor as Brazil corn and soybean numbers were higher than last month, while Argentine numbers were lower due to dry conditions there. Rain did come to Argentina over the weekend, but the forecast there is dry through this week.
“Now that we have the February report out of the way, I think we’re into some more quiet times fundamentally. Not much new news,” explained Aaron Curtis, commodity risk consultant with Mid-Co Commodities. “We do have a crop report on Mar. 8, which is typically another non-event, and then we’ll turn our attention towards the end of March with the acres and grain stocks report, which is typically quite a market mover.”
Analysts are already anticipating that report, as the Congressional Budget Office put out numbers last week predicting a large number of acres planted to corn and soybeans this spring. USDA Outlook Forum next week will also show the possibility for large acres. The USDA will release its Acreage report Mar. 28.
“[We are] expecting corn acres in that 98-99 million acre range and expecting soybean acres in that 78-79 million range. Assuming normal weather here, but if you put a trend line yield on both of those numbers you can see carryouts growing considerably from where they are this year,” said Curtis.
The trade is talking about corn carryouts in the two billion bushel range and soybean carryouts in the range of 200-300 million bushels, which has signaled lower prices in new crop contracts. But the drought monitor still shows serious conditions in the western plains.
“We went into the winter months with the lowest crop ratings for winter wheat on record, so that’s also something to watch here as we move forward,” said Curtis.
Curtis believes the moisture levels throughout the Eastern Corn Belt from Illinois to the east put farmers in a good position begin the growing season. But he said the Western Corn Belt is still an area of concern.
“In order to get some of those trend line yields up close to 160 bushels per acre, we’re going to need those acres out there to produce a pretty good crop in order to keep those numbers up there,” said Curtis. “A lot of weather watching going to happen this year.”
Curtis will also keep an eye on domestic corn demand as corn exports could perk up with Brazil still a few weeks away from corn harvest. Soybean demand will depend on how quickly the South American harvest comes and logistically how well they can meet the world demand.
The U.S. financial situation and looming debt ceiling talks could also affect grain markets at any time.
Carrie Muehling can be reached at firstname.lastname@example.org.