January 16, 2017
Corn traders make little adjustment following the latest round of USDA data. Personally I didn't see any major surprises or changes in the USDA data.
I could argue that the Argentine corn production number could have been reduced a bit, but fully understand the USDA wanting to wait until more information is known. There's also some argument that the USDA may have been a bit conservative with their originally Argentine estimate.
Here at home U.S. planted acres, harvested acres and yield were all reduced a fraction, prompting total production to be lowered by -78 million bushels. We still however remain record large with 15.148 billion bushels being harvested on a yield of 174.6 bushel per acre. Exports were left "unchanged"; Ethanol usage bumped higher by +25 million bushels; Feed use lowered by -50 million bushels.
Net-net total domestic demand was cut by -25 million bushels and ending stocks were lowered by -48 million bushels. The Dec. 1 stocks report was also released yesterday and showed corn stored in all positions at 12.4 billion bushels, up +10% from Dec.1 of the past year.
Of the total stocks, 7.61 billion bushels were thought the be stored on farms, up +11% from a year earlier. Off-farm stocks were reported at 4.77 billion bushels, up +8% from a year ago. I wish I could think of something new or exciting to say, but I feel we are stuck in the mud. I'm not real worried about the downside at this juncture.
Unfortunately the upside doesn't offer much hope. I suspect we will have to trim more than -5 million new-crop U.S. acres to excite the trade in any capacity. Throw on top a weather story then perhaps we have something.
Outside of all that I'm thinking we continue to trade in a fairly narrow range. Meaning I will be fairly quick to reduce more new-crop risk if we can push prices a bit higher. I continue to stay fully engaged and closely monitoring prices and headlines.
About the Author(s)
Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead.
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