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Corn Stocks Could be Big Market Mover on USDA Report Day

Hoosier Ag Today by: Andy Eubank

March report preview

Arlan Suderman Feb 15With the end of March come two highly anticipated reports from USDA, the quarterly stocks update and the annual Planting Intentions report. Both reports are released at noon Eastern time Thursday and the average guesses from analysts is for planted acreage to be 89.97 million acres of corn and 83.06 million acres of soybeans. Both figures would be higher than what was planted in 2015.

It is the stocks report that could be a market mover though, according to INTL FCStone Chief Commodities Economist Arlan Suderman.

“That’s where USDA has the biggest tendency to have big surprises that are market moving with little logic as to which direction they’d be, so therefore not really anticipated and catching traders off guard. Corn stocks would be the number one place we would look for a potential surprise. We’ve seen corn trade the daily limit, up or down, in 3 of the last 5 years following the end of March report.”

So the corn stocks number is what traders will be watching closest.

“In the end I think that’s bigger than the acreage report,” Suderman told HAT, “although the acreage report could either add to the bullishness or bearishness of the stocks report, or take away from it. But stocks are the big one right now.”

Suderman says most soybean usage is known since there isn’t a feed usage category as you’ll find in corn, and that’s where large swings can occur. So a soybean surprise isn’t as likely although, “there can be surprises there if stocks differ by more than about 30 or 40 million bushels, and that would suggest maybe USDA has either over or underestimated the size of the crop.”

Mike Silver-14Mike Silver at Kokomo Grain told HAT anecdotal evidence from crop insurance sales data has Indiana farmers planting more soybean acres this year, but he also expects to see an increase in planted corn acres.

“I think that is due partly to less wheat that was sowed last fall,” he said. “So I think we will see here in Indiana probably an increase in corn acres and an abnormally larger percentage shift towards soybeans from the normal 50/50 corn/soybean rotations here in Indiana.”

Silver will provide analysis of the reports for HAT at the conclusion of trade Thursday.

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