JUNE 30th USDA REPORT EXPECTATIONS
Monday, June 30th at 11:00 AM Central Time, the USDA will release the Planted Acreage and June 1st Quarterly Stock Reports. Below are trade expectations and our bias on the numbers coming into the report. If you’d like how Grain Hedge can help your farm marketing, please call our office at 877-472-4607. Click here to set up a live demo of the Grain Hedge trading platform that allows you to watch the live market reaction on Monday.
2014/15 U.S. Planted Acreage (Million Acres)
|
March 31st Reported |
June 30th Expected |
|
|
Corn |
91.7 |
91.725 |
|
Soybeans |
81.5 |
82.154 |
|
Wheat |
55.8 |
55.818 |
Soybeans
Traders expect the USDA to report 2014/15 soybean acres at 82.15 million acres, up nearly 700,000 acres from the record acreage projected in the March 31st Prospective Planting report. Assuming yield potential remains favorable, this acreage figure would push U.S. production to 3.7 billion bushels for 2014/15, up 12% from 2013/14. It is important to keep in mind that this surge in U.S. production is coming at a time when global ending stocks are expected to increase 22% in 2014/15.
In light of these bearish fundamentals, the new crop soybean market has remained relatively strong in recent weeks. With November 2014 soybeans closing at $12.44 in Thursday’s trade session we feel there is more downside, than upside, looking toward harvest prices. With this in mind, it is our opinion that now is a good time to protect a portion of expected production using a futures or option strategy.
Corn
Corn remains a different beast in the upcoming marketing year, with few acreage revisions expected in Monday’s report. On average, analysts only expect the USDA to raise corn acres by 25,000 acres from their projection in the Prospective Planting report. This slight increase would still have overall corn acres down 4 million acres year over year, and leave overall production unchanged from 2013. World corn stocks are expected to only increase 8% year over year, well below the surge in global ending stocks expected for soybeans.
Considering a corn market which has traded lower in recent weeks and the questions surrounding new crop acreage, we feel corn has a larger chance of holding a bullish surprise in Monday’s report.
Call the office to discuss pricing strategies as we come into Monday’s USDA report. Our number is 877-472-4607 and can be reached between 8AM and 4PM central time each day.
Growing Condition Outlook – Impact of El Nino
Today Planalytics had its web meeting focusing on the factors that would influence the intensity of the expected El Nino weather event. Senior Meteorologist Jeff Doran’s main take away was that not all El Nino weather events are the same! In fact a mild El Nino which is classified as sea surface temperatures that average between +0.5ºC and +1.0ºC might actually result in a growing season with little precipitation. Although Planalytics is expecting an El Nino event to occur, there are still indicators that have yet to point to a Moderate or Strong cycle that typically results in more mild growing conditions and adequate moisture throughout the growing season. For a full report on the Planalytics El Nino web meeting give the office a call at 877-472-4607.
THERE IS A SIGNIFICANT RISK OF LOSS IN TRADING FUTURES AND OPTIONS.
FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR FULL RISK DISCLOSURE AT WWW.GRAINHEDGE.COM
