Market Closes - May 10, 2016

Posted on May 10, 2016

Soybean and meal futures soared today following release of a bullish WASDE report at midday. USDA is forecasting 2016/17 ending stocks at only 305 million bushels, down from 400 for 2015/16 and way below the average trade guess of 405 million. One factor was a 16/17 export forecast of 1885 million bushels, up from 1740 this year.  Less production and more usage equals lower stocks.  On the world level, 2015/16 ending stocks are forecast at 74.25 mmt and 2016/17 ending stocks at 68.21 mmt, or 5 mmt below the trade guess. Despite today’s bullish price action, USDA’s 2016/17 price range is $8.35-9.85, which isn’t much different than this year’s $8.85/bushel (November futures and cash bids seem to offer the high end of that range now.)  Soybean futures are up $2.00/bushel in just over 2 months – what’s next?

Corn ending stocks estimates came in smaller than the trade expected, so corn futures also found strong buying interest.  2016/17 exports may jump 10 percent from this year to 1.90 billion bushels.  However, if production reaches the 14.4 forecast, ending stocks grow 350 million bushels during 2016/17.  The low-end of USDA’s price forecast is $3.05/bushel, compared to this year’s average price of $3.60.

Today’s action was likely helped along by heavy speculative buying; after all, the specs are long corn and soybeans.

Cattle futures closed little changed after Monday’s huge rally. Boxed beef values surged higher again today. Choice up 3.13 at 210.70; Select up 4.55 at 199.49. 

Lean Hog futures closed higher with trading ranges much narrower than yesterday. Traders seem to remain positive about the hog market. FOB Plant Pork closed up .15 at 82.75.

Corn Jly +12 381; Dec +11 388 (hi 392)

Bean Jly +57 1084; Nov +52 1067 (hi 1080)

   Meal +20 limit  360

   Oil +61 3344

Wheat Jly +5 461 (hi 469); Dec +5 490

  KC +2 448; MGE +3 534

Oats +2 192

Rice +18 1140

 

LC Jun -2 12327; Oct +22 11905; Dec +17 11850

FC May -60 15020; Aug -52 15032; Oct -12 14767

LH May +60 7670; Jly +45 8167; Oct +10 6965

Milk May -1 1274; Jun -7 1252

US$ +.1%

Dow +222 17928

SP +26 2084

NAS +60 4810

Tran +93 7832

  VIX -.92  13.65  -6.3%

 

WTI +109 4453

Brent +183 4546

Gas +4 148

NG +7 216

HO +6 134

Eth +3 153

Gold +1 1267

Slvr +6 1714

 

2-yr +.008 0.722%

5-yr -.001 1.120%

10yr -.007 1.752%

30yr -.016 2.605%

 

From USDA-NASS:

  Kentucky farmers expect to harvest 30.3 million bushels of winter wheat during 2016 according to the Kentucky Field Office of USDA's National Agricultural Statistics Service. The expected crop for 2016 would be down 6 percent from the previous year. Farmers seeded 550,000 acres last fall with 410,000 acres to be harvested for grain. Based on crop conditions as of May 1 and assuming a normal growing season, farmers expect a yield of 74.0 bushel per acre, up 1.0 bushel from 2015. Acres for other uses totaled 140,000 acres and will be used as cover crop for tobacco or cut as silage or hay.

 

The final production estimate of Kentucky burley tobacco for 2015 was 104 million pounds, down 36 percent from the 163 million pounds produced in 2014. Average yield was 1,800 pounds per acre, down 350 pounds from the 2014 crop. Acreage harvested was 58,000 acres, down 24 percent from 2014. Average price per pound was estimated at $1.92 per pound, down 2 cents from the previous year.

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