USDA is predicting record corn and soybean crops for 2016 as indicated in their latest Supply and Demand Report. The agency put corn yield at a record 175.1 bushels per acre and production at 15.15 billion bushels. Mike Kruger with the Money Farm says the increases came from record corn yield projections in the Eastern Corn Belt.
Kruger says demand was also increased, but not enough to curb the ending stocks figure which came in at 2.4 billion bushels for (16/17).
Soybean production is also forecasted to be record large at 4.06 billion bushel with a 48.9 bushel per acre yield. Kruger says that was offset by strong demand with new crop ending stocks at 330 million bushels and old crop ending stocks were lowered to 255 million bushel.
He says soybean prices digested the production numbers very well due to the strong export figures and the fact that the trade expecting USDA will have to increase soybean exports in future reports.
New crop U.S. wheat ending stocks were raised slightly to 1.1 billion bushels and global stocks were lowered in the old crop to 241.9 mmt and to 252.8 mmt in the new crop category. Some of that came from a drop in EU production.
Kruger says as far as marketing advice, he’s telling producers to lock in the current strong basis levels and wait to price later. However, they may want to buy a call option to cover a potential rally.
