Corn, soybeans, and wheat all down upon opening
By Diego Flammini, Farms.com
Farmers and producers of soy, wheat, corn, and other agricultural commodities waited anxiously for the United States Department of Agriculture to release their World Agricultural Supply and Demand Estimates (WASDE) monthly, Quarterly Grain Stocks and Wheat Seeding reports. Commodity experts are recommending farmers take distinct actions for different cash crops. Here, we look at how wheat, corn, and soy faired after the report’s release.
Wheat
Wheat futures did close lower as higher ending stocks and higher global numbers weighed, but is gaining support at $6.00/bushel. The 2.1 million acre dip came out of nowhere and could be a shot in the arm for wheat but it’s still too early to tell. It all depends on the winter kill damage in the next few months from the Black Sea Region and the U.S.
WASDE reports U.S. wheat supplies for 2014/15 slightly increased on beginning stocks with projected stocks up 33 million bushels. Average farm price projected to be 10¢ higher per bushel ranging from $5.90 to $6.30
Farms.com Risk Management’s Chief Commodity Strategist Moe Agostino’s recommendation is to wait for higher wheat prices after the recent fall from mid-December 2014 highs.
Corn
Stocks, production, and yields are all lower than expected could keep the funds from selling but lower soybean futures could weigh on prices short-term. If the USDA March Planting Intentions report shows a 2-3 million acre loss, corn futures could be supported at the $4.25 - $4.50 per bushel by the end of March with a better demand picture and a possible jump to $5.00 per bushel if one throws a weather problem into the mix. Farmers have enjoyed an upward sloping uptrend in corn futures since the bottom in October of 2014 despite a record US crop but will this trend continue? The trend is your friend for now.
WASDE reports total projected corn use for 2014/15 down 75 million bushels with lower feed and residual use offset by corn used to produce ethanol.
Soybeans
Higher yields, ending stocks and global numbers were responsible for the price of soybeans dropping. The next 45 days will be important. If the weather in South America stays the same, soy prices could drop even further.
Agostino recommends selling soy on a bounce saying producers should be 100% sold on their 2014/15 soy crop, and 50% sold on their 2015/16.
The next regularly scheduled WASDE report is to be released Tuesday, February 10, 2015.