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Markets left in limbo after Friday’s “data dump”

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Grain markets are still lacking direction after the much anticipated “data dump.” A market analyst evaluates Friday’s report data and anticipates what grain markets will look like moving forward.

The U.S. Department of Agriculture (USDA) on Friday released its February World Agricultural Supply & Demand Estimates (WASDE) report. Brian Grossman, market strategist with Zaner Group, says the report came with a surprise – postponed final crop production numbers.

“They lowered the harvestable acreage by 100,000, (which is) not a big deal. Production came down to a 176.4, well below what the average trade was looking for. That is friendly. However, ending stocks (are) still at a 1.7 billion bushel carryout, with a big hit coming from feed and residual. (We) also saw ethanol get shaved, which is not a good sign if we’re going to have continued problems with ethanol demand numbers.”

Analysts speculated potential changes to soybean export demand, given current trade relations.

“They somewhat punted on this, and increased crush and decreased exports a hair,” Grossman said. ”Ultimately, a lower yield – at 51.6 – and slightly lower harvestable acres. (This) keeps us at an ending stock of 910 million bushel. So, that doesn’t change the outlook that much, but I think we’re going to find out a lot more about soybeans in the near future.”

The U.S. Department of Agriculture also released its postponed Quarterly Grain Stocks report. Grossman says he was “impressed” by this report.

“Corn coming in below 12 billion bushels. I was hoping we were going to see that, but I felt like it was going to be a far stretch. But, coming in at 11.952. That is friendly, especially if we can get our demand situation to turn around,” Grossman said. “Soybeans coming in well above last year, as we were expecting, at 3.73 billion bushels.”

Grossman says, “All-in-all, a lot of things are going to be a huge factor in the fundamentals in the next couple of months.” He encourages producers to place orders, to better prepare for future volatility.

“While this report was boring and blah, (it) doesn’t mean something’s not going to change down the road,” Grossman said. “Let’s keep waiting and watching. Don’t be getting too nervous about things. We definitely have reason to be concerned and looking for ways to cover the bottom line, but I don’t think anyone should be running out, making panic sales based off of anything we’ve seen here. There’s a lot of news coming in the next couple weeks.”

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