Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Ideal Growing Conditions Taking Toll on Commodity Prices
What now sounds like a broken record has grain market analysts and traders lulled into the belief that current growing conditions may lead to even larger corn and soybean crops than estimated in the July USDA Supply and Demand Report. That report estimated the national average yields for U.S. corn, soybean, and SRW wheat production at 153.4, 42.6, and 41.9 bushels per acre, respectively. The belief that U.S. crop conditions are good ‘n better in a large part of the Corn Belt has commodity prices parting company to some degree with the performance of the Dow, which is currently higher than it has been in some time, just topping 8,600. Since the first week of June, Dec ‘09 corn prices have declined $1.36 per bushel ($208.62 per acre); Nov ‘09 soybeans $1.95 per bushel ($83.07 per acre); and Dec ‘09 SRW wheat $1.62 per bushel ($67.87 per acre). Only time and the impact of the weather on the remainder of the growing season will tell whether pricing opportunities arise for advancing pre-harvest sales for ‘09 corn and soybeans.
USDA Weekly Export Sales Report – Week Ending July 9
While totals for corn, soybeans and wheat in this week’s USDA export sales report fell generally within the range of pre-report guesses, corn and wheat numbers remained short of what was needed this week to stay on pace with USDA annual projections.
Pre-report estimates had weekly corn export sales at 33.5 to 45.3 million bushels combined old crop and new crop sales. The weekly report showed export sales of 27.5 million bushels in old crop corn, well above the 3.7 million bushels needed to meet USDA’s revised projection of 1.8 billion bushels, while new crop sales were 18.4 million bushels. Total shipments of 38.2 million bushels were below what was needed this week. The report is viewed as neutral to bearish.
Pre-report estimates for soybeans ranged between 18.4 and 27.6 million bushels of combined old crop and new crop sales. The weekly report showed export sales of 4.9 million bushels in old crop soybeans, making total sales for the year 1.266 billion bushels, above USDA’s revised projection for 1.26 bb. New crop sales were reported at 20.2 million bushels. Total shipments of 14.3 million bushels were slightly below what was needed this week. This report is viewed as bullish.
Pre-report estimates for wheat ranged between 14.7 and 18.4 million bushels. The weekly report showed export sales of 15.5 million bushels, below the 15.8 million bushels needed to stay on pace with USDA’s revised export projection of 925 million bushels. Shipments of 6 million bushels were well below what was needed this week. The report is viewed as bearish.
Market Strategy
New crop corn and soybean futures prices have continued their downward slide this week. Dec ‘09 corn futures are currently trading at $3.32 as compared to $3.40 a week ago. Nov ‘09 soybean futures are currently trading at $8.97 as compared to $9.16 a week ago. Corn is expected to test support this next week, meaning that prices could move even lower. Soybean prices are expected to test resistance meaning they could move higher.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.