Commodities Market Update

July Corn and Wheat Update

Wed, 1 Jul 2009 08:59:29 -0700

The grain market plunged on the shocking bearish USDA acreage report yesterday morning. It appears everyone estimated the corn acreage number wrong. Rather than reporting that there were 1-2 million fewer acres of corn planted in the US because of the late start to planting due to rains this spring, the USDA reported that there were several million more acres planted instead!
The trade was looking for 84.158 million corn acres planted; down from the previous 84.986 million acres that the USDA said would be planted in the previous report.

Adding to the bearishness was the corn stock-inpositions report which was also far above the consensus estimate and was even above the largest estimate on the street, coming in at 4.266 billion bushels. The consensus has formed around 4.190 billion, so usage was down and down substantially.

Turning to spring wheat this report was also quite bearish, with the USDA reporting that there is now 13.772 million acres of spring wheat seeded and that there is 2.555 million acres of durum wheat. Going into the reports the consensus estimate was 13.102 and 2.403 million acres respectively. The “all wheat” planted acres were reported out at 59.775 million acres compared to 58.337 million that had been expected. Hard, soft and spring wheat futures all traded lower on that news, and could not have done otherwise in light of the huge corn crop and the weight from that pit.
The wheat stocks – inpositions report was neutral.

Question: Do we still want to be long wheat by July 15th?

Cinco de Mayo Wheat Crop Update

Tue, 5 May 2009 10:02:49 -0700

As you can see the wheat market has found a comfort zone ranging from 5.35 to 6.15. The weekly USDA progress report showed the winter wheat crop is heading swiftly toward maturation and the harvest, 47% of the crop is now rated “good/excellent,” compared to 45% a week ago and 47% last year. In other words, the crop is progressing nicely. 27% of the winter wheat crop is
now “headed,” up from 21% last week but well below the 35% average of the past five years.
The spring wheat crop, however, is not faring well, with 23% of the crop planted, well below the 59% “norm” of the past five years. Further, only 7% of the crop has” emerged,” and that is down from the 20% average of the past five years.

Updated Crop Numbers

Tue, 31 Mar 2009 10:10:26 -0700

Today March 31 the USDA released acres numbers for this year’s crop. All Wheat 58.638 mil. acres. Broken down winter 42.889, Spring 13.304 Durum 2.445.Using an average abandonment rate of 12% and a yield of 43 national average would equal a 2.219 Billion Bu crop for the up coming harvest. Assuming similar usage numbers to last would suggest a carry over of 537-mil bu. At the end of the 09/10 marketing year.

Kansas City July New Crop Report

Mon, 26 Jan 2009 09:48:15 -0800

With soft wheat acres estimated to be 26% below year ago from 11.2 million to 8.29 million and hard red winter wheat acreage estimated to be down 3.2% from 31.22 to 30.2 million, any winter kill problems should have a dramatic effect upon prices. This winter, snow coverage has been less than ideal, and the temperatures have been colder than normal, so some winter kill likely has occurred. As usual we will not know for certain until the winter crop begins to emerge in the spring, and, as we all know wheat is a weed. The bottom being traced out has our attention as does the fact our blue line is inching closer to crossing the red.

New Crop Outlook

Wed, 14 Jan 2009 10:47:01 -0800

KW July (new crop)

The USDA pegged 2008-09 U.S. wheat carryout at 655 million bushels and wheat stocks as of Dec. 1 at 1.422 billion bushels, above the average trade estimates. However, estimates for 2009 winter wheat seedings were below expectations and seen as bullish for deferred contracts, traders said.

"The lower-than-expected winter wheat seedings numbers are fundamentally supportive to new-crop contracts, but old-crop futures will receive some
pressure from higher domestic stocks.”