Play Turner’s Take Ag Marketing Podcast Episode 276

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In this week’s podcast we go over the latest news in the grain and oilseed markets.  We also take a look at the May WASDE from last week to get an idea of possible price ranges for old and new crop going forward. Make sure you take a list to Turner’s Take Podcast!

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May WASDE 

The May WASDE showed tight stocks for old crop and new crop soybeans.  Even with additional acres or a better than trend line yield, soybeans will most likely be under 200mm bushel ending stocks for new crop. This keeps soybean prices elevated until the next South American harvest in 2022.

Corn is a different story. Adding a few million acres of corn could push new crop ending stocks to a 2.0 billion and prices into the $4s.  A loss of 5 bpa this summer off the national yield could send new crop over $6 and maybe even $7.  When corn is projected to have a 1.5 billion ending stock that means we are at 10% stock to usage. That is right on the line of adequate and tight stocks.  A loss of 500mm bushels (6 bpa) or a gain of 500mm bushels (3mm acres) can have a huge impact on prices.   It is the difference between burdensome stocks (over 2 billion) and very tight stocks (just over 1 billion).

The charts on the bottom of this email show the net change of corn and soybean acres from the March to June report for the past 20 years. Only in 2007 was corn up 3mm acres (soybeans down 2mm) and in 2012 soybeans were up 3mm acres (corn up 1mm).

We haven’t even started to talk about new crop Chinese demand, the shortage of old crop corn in Europe, and the dry conditions in much of China’s top corn producing regions.  We do think more wheat will be used for feed instead of corn but that can’t solve all the balance sheet issues. Good growing weather and more than a couple million acres could send new crop corn into the $4s.  A serious weather threat and yield loss cold send the market much higher.

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