Tuesday’s Planted Acreage report was surprisingly bearish for both the corn and wheat markets, but a little bit better than feared for the soybeans.
The USDA estimates there are just over 87 million acres of corn this year, which is up about 2 million from the March intentions report.
That was all the reason traders needed to push the market limit lower on Tuesday and it probably means we will see the December contract head down to the December low.
The soybean acreage number of 77.5 million is a new record high, but it was considerably lower than expectations.
The lower than expected acres and the strong demand we are seeing are both supportive to the soybean complex and it looks like the old crop contracts will have a chance at testing the June highs.
I was surprised that Kansas wheat acreage was increased by 300,000 to 9.3 million. The increase in acres and the good yield reports we have been hearing across much of the state basically guarantees that we will see the wheat production estimate increase in the July supply and demand report.
That is not good news for the wheat market. The wheat needed to see a supply problem to offset the poor wheat demand we have been experiencing to have a chance at a sustained rally, plus the increase in local supply means we can’t expect much of an improvement in basis levels either.
I don’t have a lot of positive news this week, but keep an eye on the forecasts. The corn and soybeans will be very sensitive to any extended period of hot/dry weather.
Schwieterman Marketing, L.L.C. specializes in risk management and cash grain and livestock marketing plans. For information on the markets or our marketing service you can contact Bret Crotts at 888-437-9131 or bret@swbell.net.
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