Corn and soybean futures soared higher after U.S. Department of Agriculture (USDA) officials released the quarterly Grain Stocks report.
The quarterly Grain Stocks report, released in September: “Half the time it’s a dud and nothing happens. Other times you get volatile moves,” says Jim McCormick, branch manager of Ag Market. The Chicago Board of Trade (CBOT) today welcomed volatile moves.
“What we saw was a pleasantly bullish surprise,” McCormick says. “They lowered their adjustments to both the bean residual and corn residual categories, which gave us a bullish surprise.”
“(For the) corn carryout, the trade was guessing it to come in at about 2.243 billion. It came in at 1.995 billion. (For) the bean carryout, they were guessing around 575 million. It came in at 523 million bushels, lower than anticipated,” McCormick says. “We have a nice move in the markets today: Back up to the old highs in corn and beans close to their old highs.”
McCormick says, “It’s a positive day for American agriculture, as tightened supplies could generate higher prices and higher revenue.”
“Let the market tell you what to do,” McCormick says. “Move the grain out. The market wants it now to feed Chinese demand. Then use an option strategy to re-own it, if you’d like.”