MarketsFarm — Soybeans may see significant changes in new-crop carryout numbers when the U.S. Department of Agriculture (USDA) releases several key reports Friday, but corn and wheat estimates will likely stay put for the most part, according to one analyst.
USDA releases both its crop production report and its monthly world agricultural supply/demand estimates (WASDE) on Friday. Ryan Ettner of Allendale Inc. at McHenry, Ill. said while new-crop wheat carryout is projecting a slight increase, new-crop corn will likely show a small decline.
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“We’re looking at (wheat) carryout to go from 592 (million bushels) to 598 (million). That’s only a one per cent increase. For corn, we’re looking at a carryout decline from 2.262 (billion) to 2.168 (billion), a 4.1 per cent decline. Also, not all that big,” Ettner said.
Soybeans, however, will see nearly triple the decline in carryout as corn in terms of percentage.
“Going from a carryout of 300 (million) to 267 (million). That’s an 11 per cent decline,” he said, adding there was also surprisingly limited pre-buying in soybeans.
“We already know funds have liquidated a bunch of their soybean longs and are virtually slack corn. When it comes to trade from funds, they’re showing signs they’re basically done trading grains for now.”
Expected figures from the WASDE report were already priced in by Wednesday, Ettner said, ignoring weather news and updates from the war in Ukraine. But despite tighter supply for corn, prices may continue to come down.
“For corn, 2.168 (billion) projects more along the lines of $4.30 (per bushel). Possibly as high as $4.50,” he said (all figures US$).
The Chicago Board of Trade (CBOT) should react to whatever USDA publishes on Friday, according to Ettner. However, he only expects the reaction to last the rest of the day before the markets turn their attention elsewhere.
“You’ll have a brief reaction, but I think by (Aug. 14), we’ll already turning back to a continued grind lower. Weather threats have been taken off the board and we’ve seen corn and wheat react less to Russian headlines recently than they did before,” Ettner explained.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
