Home | MARKETS, TOOLS & DATA / REPORTS | Market Perspectives

Market Perspectives – August 15, 2014

Contents

  1. Chicago Board of Trade Market News
  2. CBOT Corn Futures
  3. U.S. Weather/Crop Progress
  4. U.S. Export Statistics
  5. FOB
  6. Distillers Dried Grains with Solubles (DDGS)
  7. Country News
  8. Ocean Freight Markets and Spread
  9. Ocean Freight Comments
  10. Interest Rates

Chicago Board of Trade Market News

Outlook: USDA’s August WASDE and Crop Production reports were published on Tuesday, and the estimated average U.S. corn yield was increased by 2.1 bushels above the prior trend estimate to a record of 167.4 bushels per acre. Such a large yield is expected to produce just over 14 billion bushels of corn. The combination of that production and the beginning stocks will produce a new record corn supply for the approaching 2014/15 season. However, the estimate for U.S. corn ending-stocks in 2014/15 of 1.808 billion bushels was virtually unchanged from the prior July estimate of 1.801 billion bushels. Bearish traders with short position were disappointed because they needed an estimate of U.S. corn ending stocks well in excess of 2 billion bushels to justify driving prices lower. Because of this, the outlook is that there can presently be a limited bounce in corn futures contracts as positions are adjusted. Future corn yield estimates for the 2014/15 season will need to increase further before there is sufficient justification to drive prices lower. A summary of the feed grain data in Tuesday’s August WASDE follows:

  • The first survey-based estimate from USDA is for a national average corn yield of 167.4 bushels per acre. The sorghum yield forecast was increased 3.0 bushels per acre for a national average yield of 67.1 bushels and production of 429 million bushels. Yet, the 2014/15 ending stocks for U.S. sorghum declined by 10 million bushels due to increased demand. The report also contained a 2 bushel per acre yield increase for barley to 73.2 bushels per acre, but barley ending stocks only increase 1 million bushels from the prior estimate, to 81 million bushels for 2014/15.
  • The record corn supply of 15,243 million bushels for the 2014/15 season is not expected to be so cumbersome; The production is partly offset by a 65-million-bushel reduction in beginning stock for the 2013/14 season as corn use for ethanol and exports were increased 45 million bushels and 20 million bushels and in the 2014/15 season, ethanol and exports were each raised 25 million bushels, and feed and residual was increased 50 million bushels. The end result is that the low of USDA’s projected season-average farm price for U.S. corn was lowered 10 cents to $3.55 per bushel, which is about present price levels