The U.S. Department of Agriculture (USDA) observed “Report Day” on Friday, releasing it’s Quarterly Grain Stocks and Planted Acreage reports. Grain stocks came in above analyst expectations, shifting market trends in a positive direction.
December corn traded seven-cents higher while November beans gained 10-cents, following the reports’ release. Zaner Group market strategist Brian Grossman was surprised to see green on the board, especially after Friday’s bearish Quarterly Grain Stocks report.
“Corn came in at 5.306 billion bushels, above the average trade estimate and 77 million bushels above where we were this time last year,” Grossman said. “Soybeans (were) even worse on the stock number -1.22 billion bushels, 257 million above where we were this time last year. Those are both very big numbers, showing that we have a lot of grain yet out there to be used.”
The Planted Acreage report also came as a surprise, with slightly less soybean acres planted.
“Corn (acres) came in at 89.1 (million), 1.1 million acres above the Prospective Planting report,” Grossman said. “Soybeans came in a little bit lower than the average trade estimate at an 89.55 (million), up only 575,000 from the Prospective Planting report.”
Grossman believes Friday’s reports lean towards “a turning point in the grain markets.” He expects weather to motivate shifts in the marketplace. However, he advises growers to be “optimistic,” but “very cautious about price targets” when it comes to the Quarterly Grain Stocks findings.
“If you’re in the $4.50 camp, I would say, ‘Strongly reevaluate it,’” Grossman said. “If we can get any bump back up close to that four-dollar level, I would be looking to make sales through that region. Soybeans could be an anchor for corn. Without any kind of finalized trade agreement from China or NAFTA, we may see jittery markets before trying to make large gains to the upside.”