The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
The FBN Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
Export Sales Announcement
Private exporters reported to the U.S. Department of Agriculture export sales of 130,632 metric tons of soybeans for delivery to Mexico during the 2018/2019 marketing year.
USDA Hog Report Shows Record High Supply For Q2 2018
The USDA’s quarterly hog and pig report showed an increase of 3.4% in the hog population from the first quarter of 2018. The US herd now stands at 73.451 million head, 103.4% of the population level this time last year, as well as a record high for Q2. A record number of baby pigs being born to meet demand for 4 new packing plants built across the country in late 2017 and Chinese tariffs have built up supply of hogs according to the report. The herd population numbers exceeded analysts’ expectations of 73.140 mil head. Increased farm efficiency has also led to record pigs per litter.
Buenos Aires Grain Exchange Cuts Argentine Soybean Yield To 9 Year Low
Severe drought stress throughout the growing season had led analysts to reduce Argentine bean yield to 2.14 tonnes per hectare (31.2 bpa), the lowest since the 2008/2009 season. Drought is estimated to have slashed this year’s production down by 15 MMT (551 mbu), a 37.4% reduction from last year.
Quarterly Grain Stocks And June Acreage Numbers Released At 12 PM EST
Traders’ expectations for corn stocks at 5.268 bbu would make for the biggest Jun 1 supply since 1988. Analysts also expect 500k more corn acres than was reported by the USDA on Mar 29. Soybean stock estimates at 1.225 bbu would be a record amount of supplies for the crop and would be an increase of 27% from June 1, 2017. Soybean acres are also expected to be increase by 979 mil acres from the Mar 29 report, with the average of expectations just shy of 90 mil acres at 89.691 mil acres. Wheat stocks are expected to come in at 1.091 bbu, a 7.6% decrease from 2017. This number will be used to determine the 2017/18 carry-out. For acres, all wheat area is expected to decline by 237k acres. Spring wheat acres make up a bulk up of the expected reductions, shrinking by 196k acres, with marginal decreases in winter wheat and durum acres.
USDA Quarterly Stocks And Acreage Report Estimates
|
Stocks |
Average Estimate (bbu) |
Range of Estimates |
USDA Mar 1, 2018 |
USDA June 1, 2017 |
|
Wheat |
1.091 |
1.042-1.190 |
1.494 |
1.181 |
|
Corn |
5.268 |
5.004-5.500 |
8.888 |
5.229 |
|
Soybeans |
1.225 |
1.115-1.305 |
2.107 |
0.966 |
|
2018 Plantings |
Average Estimate (mil acres) |
Range of Estimates |
USDA Mar 29 Forecast |
USDA 2017 Final |
|
Corn |
88.562 |
87.6-90.436 |
88.026 |
90.167 |
|
Soybeans |
89.691 |
89.1-90.7 |
88.982 |
90.142 |
|
All wheat |
47.102 |
46.575-47.7 |
47.339 |
46.012 |
|
-Winter wheat |
32.633 |
31.469-33.1 |
32.708 |
32.696 |
|
-Spring wheat |
12.431 |
12-13 |
12.627 |
11.009 |
|
-Durum |
2.030 |
1.996-2.119 |
2.004 |
2.307 |
|
All cotton |
13.781 |
13.450-14.137 |
13.469 |
12.612 |
|
Sorghum |
5.909 |
5.7-6.2 |
5.932 |
5.626 |
|
Barley |
2.336 |
2.2-2.6 |
2.286 |
2.481 |
|
Oats |
2.760 |
2.695-2.866 |
2.716 |
2.588 |
|
Rice |
2.703 |
2.665-2.740 |
2.690 |
2.463 |
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
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