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| Have enough of your neighbors thrown in the towel so we can bottom?
Grains trying to stay alive following the USDA outlook forum yesterday.
Soybeans see a nice bounce, wheat tested it's lows from November, and corn continues to trickle lower.
The outlook forum yesterday was bearish, as expected. But overall was not "more" bearish than expected. The world was expecting bearishness, so overall the report could’ve been a lot worse.
They had corn carryout at 2.5 billion. Which is a large number, but there was a lot of talk about a +3 billion.
Historically, the USDA has been too high on their ending stocks the last 5 of 7 years.
They are starting corn yield at 181, which is well above last year's all time record yield of 177.3.
That number is possible, but especially with prices at these levels I find it hard to fathom we will be remotely close to 181. Weather would have to be perfect for this to happen, but possible I guess.
In fact, the USDA is on average 6 bushels an acre too high on their February outlook over the last 5 years. Which if happened this year, would bring us to 175.
There is a lot of talk that the 91 million acres the USDA has will be too high because of the price of corn. The thought process is that there is no way producers will throwing extra expenses at this crop or be planting extra corn.
But we all know reality is that Mother Nature will have a say on actual acres, as could other agronomic factors and price movements. The recent rally in cotton is not adding more acres to anything other then cotton.
Soybean ending stocks were a lot bigger than last year. They came in at 435 vs last year's 315. The USDA has been too high on the carryout the past 12 of 16 years.
They are starting bean yield at 52. The USDA is actually surprisingly too low on the yield usually. They have been too low the past 7 of 10 years. Now this speaks volume for the demand we have in soybeans.
If we plant less than 87.5 million acres, things could get very tight very fast.
So the market had a negative reaction to the report, but the fact that most of the markets were actually higher today was hopefully a sign that perhaps a lot of this bearishness is already priced in…..
Read the rest of todays update where we go over just how accurate this Feb outlook typically is, if China is playing games, and critical support levels in the grains
Read Here: https://txt.so/YUZzPW
Edited by Mr.Grain 2/16/2024 21:40
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Have enough of your neighbors thrown in the towel so we can bottom? Market comments
