Well, there was hope. Anything can happen with the January reports from USDA on production and grain stocks when they come just before a long weekend.
That was Friday, Jan. 12, this is Tuesday, and that hope was not fulfilled very well.
Friday, before the Monday holiday for Martin Luther King Jr., we had the USDA Reports in the middle of the day.
Nothing changed, except fractionally. Corn production came in with a final number that was the same as the Dec. report, at 15.148 billion bushels. Yield was unchanged, at 174.6 bpa.
There was talk that the crop might go up a little, but it was just talk. The ending stocks, critical at this time of year, went up two million bushels because of a slight cut in domestic usage.
Soybean production came in at 4.296 billion bushels, unchanged from December. We had a 52-bushel yield. The ending stocks were projected to slip from 302 million bushels to 301 as we used one million fewer bushels.
Big deal
The market greeted the news with a new contract low in corn and a rebound in soybeans. It is hard to say why either of these things happened.
March corn futures dipped to 3.451⁄2 before the report, then closed at 3.461⁄4. That was a quarter below the old low, so it was not encouraging.
However, this Tuesday morning, Jan. 16, we are at 3.481⁄4, up two cents so far today.
A casual observer would assume that the trade would be relieved the crop was not increased in size, and thus rally a little. It would seem that the corn market is so negative, with two huge crops and a large carryout, that good news was met with a sigh.
There may be a little hope built into the soybeans, however. March futures made a new low at 9.441⁄2 Friday, but rallied out of the report. We closed at 9.60-1⁄2, and have added to that this morning.
Good and bad
We are currently trading 9.67-3⁄4, up over seven cents for the day. The bad news is that we last over 80 cents since the fifth of January.
The good news is the rally out of the report, and the idea that we may have a record crush reported today. I have said that South American news will dominate the winter markets.
So far, that is a little help. The weekend rains in Argentina were light. The harvest is late in Brazil, and that will limit what they call the safrina corn crop.
That is what we would call double crop corn, if we could plant corn after soybeans. The harvest in Mato Grosso, in northern Brazil, is only at 1.2 percent, versus a normal 5.3 percent.
It remains to be seen if the harvest is small, but it is late. The late part can at least help our corn picture a little, and we need any help we can get. Wheat news this time of year is about our Plains weather and about sales to foreign countries.
Exports
The winter kill in the Plains is on hold right now, so we are talking about exports. It is nice to hear, but the numbers don’t mean much except to get us thinking that the key to low wheat prices is exports.
With our dollar being relatively weak lately, exports are easier.
