Latest / Professional Ag Marketing Podcast / WASDE Sparks a Rally in Corn

Transcript

WASDE Sparks a Rally in Corn · Professional Ag Marketing Podcast

• 0:03
  SPEAKER_01: You're locked in to the Grain Market Talk Podcast.
• 0:06
  SPEAKER_01: Fast updates, market movers, and the grain news you need right now.
• 0:12
  SPEAKER_01: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: Well, today is July 10th, Friday here, and I'm Jaden Halsog here filling in for Mike Minor, and I got Jordan Rekker with us.
• 0:29
  SPEAKER_00: How are you doing, Jordan?
• 0:30
  SPEAKER_02: Good.
• 0:30
  SPEAKER_02: How are you, Jaden?
• 0:31
  SPEAKER_00: I'm doing good on this Wazday Friday here.
• 0:34
  SPEAKER_00: So big report today for the grains.
• 0:36
  SPEAKER_00: Um so Jordan, can you tell us a little bit what you found out in that report?
• 0:41
  SPEAKER_02: Yeah, it was kind of an exciting day historically.
• 0:44
  SPEAKER_02: This July report, you know, tends to not uh be too much of a market mover.
• 0:49
  SPEAKER_02: And you know, today was a little bit of a market mover up uh about nine there on the corn and um similar on the soybeans.
• 0:56
  SPEAKER_02: So not not too much of a move, but definitely of a definitely a little bit higher um move in the market because of the WASDA.
• 1:03
  SPEAKER_02: So, you know, as you kind of dive deep um into this report, uh you see that um old crop ending stocks did drop from a 2145 down to a 200.
• 1:15
  SPEAKER_02: And surprisingly, it all came from feed and residual.
• 1:20
  SPEAKER_02: So 150 million bushel bump in feed and residual from 6.2 billion to 6.35.
• 1:26
  SPEAKER_02: That um when I say surprising is because that feed and residual is a historically large number.
• 1:34
  SPEAKER_02: Um, you know, when we kind of started the year off, we felt like that was maybe a little bit too high.
• 1:38
  SPEAKER_02: And as we kind of come to a close here on the marketing year, it's actually a little bit under, is what the USCA is saying, and and continuing to push it up because of you know these higher weights that we continue to feed and um some different things like that.
• 1:51
  SPEAKER_02: Now, what surprises me a little bit is that we didn't move exports on old crop.
• 1:56
  SPEAKER_02: Exports came in at 3.325, which is a very, very large number.
• 2:00
  SPEAKER_02: But when you kind of look at the sales on exports, we are trending better than that.
• 2:05
  SPEAKER_02: So, you know, we could see another 25-50 million bushel bump in that old crop demand here yet, which would put us you know right around that two billion number to maybe even a little bit less as we kind of move forward.
• 2:18
  SPEAKER_02: So those are some pretty interesting moves there on the old crop.
• 2:23
  SPEAKER_02: That was kind of in the market already because we did have that stocks and acreage report there a couple weeks ago that did show that demand was a little bit better.
• 2:31
  SPEAKER_02: So that's probably why we didn't go back and test the highs that we saw earlier in the week.
• 2:36
  SPEAKER_02: Um, but we did see a little bit of a higher move.
• 2:38
  SPEAKER_02: Now, when you kind of flip to new crop, there uh we ended up carrying in that 2.2 uh billion bushel number down from that 2145 and did raise exports from three one three point one five to three point two, which is warranted.
• 2:55
  SPEAKER_02: You know, we kind of talked about that there last week that you know that new crop export number is a little bit light compared to where old crop is.
• 3:02
  SPEAKER_02: Um, so kind of bringing them a little bit closer together was probably warranted.
• 3:06
  SPEAKER_02: So ended up seeing a 179 on ending stocks, 11% stocks to use ratio.
• 3:12
  SPEAKER_02: That compares to last month at a 196, 12% stocks to use ratio.
• 3:17
  SPEAKER_02: So we are seeing a little bit of tightening in this balance sheet as we move forward.
• 3:21
  SPEAKER_02: 183 yield was not changed.
• 3:23
  SPEAKER_02: Um, that'll probably be looked at the next month when we have that WASE report.
• 3:27
  SPEAKER_00: So going forward here, Jordan, I mean I I look at this corn balance sheet, like you said, you know, trend line yield around a 183, and we do have some big, big demand numbers baked into there.
• 3:38
  SPEAKER_00: Um, uh, where do you think the market's gonna look at for you know market moving news going forward here?
• 3:44
  SPEAKER_02: Yeah, it's gonna be interesting.
• 3:46
  SPEAKER_02: Um, you know, as we kind of move forward, um, we do have a little bit of a weather uh deal kind of going on right now with um some pretty high temperatures as we kind of look forward.
• 3:57
  SPEAKER_02: Um right now, um good to excellent scores are are pretty decent on this crop, but not quite as good as what they were there last year.
• 4:05
  SPEAKER_02: So 186.5 is what we yielded last year.
• 4:08
  SPEAKER_02: Today we're estimated at 183.
• 4:10
  SPEAKER_02: That looks uh fairly close to where the um good to excellent scores are, but as this heat kind of moves in, you know, what does that look like out there in the east, right?
• 4:19
  SPEAKER_02: You know, some shallow rooted corn is what you know wants to kind of be talked about.
• 4:23
  SPEAKER_02: So right now, the 200-day moving average on December corn is uh 467.
• 4:30
  SPEAKER_02: We didn't quite test that earlier in the week.
• 4:32
  SPEAKER_02: We traded up to 466, and then as you kind of move a little bit higher, um, up into that 475 range, that is 61% uh retracement.
• 4:42
  SPEAKER_02: So those are some pretty big areas of resistance, and we'll kind of see what the market kind of thinks of those areas as we move into next week.
• 4:48
  SPEAKER_00: For sure.
• 4:49
  SPEAKER_00: Definitely probably looking at weather here going forward.
• 4:51
  SPEAKER_00: I think Sunday will be a big night.
• 4:53
  SPEAKER_00: Will the forecast change?
• 4:55
  SPEAKER_00: Will we take some heat out of the you know eight to fourteen day forecast, or will we add some more back in?
• 5:00
  SPEAKER_00: But looking at the soybean side of things, Jordan, what did you what were your takeaways there?
• 5:05
  SPEAKER_02: Yeah, pretty quiet report there.
• 5:07
  SPEAKER_02: Um, we did lower ending stocks on old crop, uh 10 million bushels went from a 340 to a 330 uh million bushel ending stocks number.
• 5:17
  SPEAKER_02: So not much of a change there.
• 5:18
  SPEAKER_02: And then as you kind of roll over into the new crop, um, really didn't see any changes at all.
• 5:23
  SPEAKER_02: Um, they did raise exports 30 million bushels, and that um you know does kind of make sense with what we saw earlier this week on China.
• 5:31
  SPEAKER_02: So 310 um million bushels on any stocks, 6.9% stock series ratio, kind of bumping into that$12 number there on November soybeans is where we're kind of sitting today.
• 5:43
  SPEAKER_00: Like you said, Jordan, I think X the export number in the soybeans would be a big number to watch here going forward.
• 5:48
  SPEAKER_00: We had about five to six hundred thousand metric tons of flash sales here to China this week, and that's kind of what got the market started this week.
• 5:56
  SPEAKER_00: We saw soybeans up about 45 on Monday there, and there was some rumors of China poking around there, maybe buying some soybeans from the US.
• 6:04
  SPEAKER_00: But I I think with the increase in exports here for new crop, the USDA is building some optimism that China will be buying um soybeans here going forward.
• 6:14
  SPEAKER_00: Um, now that we um have these numbers here, Jordan, for soybeans, what where do you think uh the soybean market's gonna be looking at here going forward?
• 6:23
  SPEAKER_02: Yeah, so now that we're kind of back onto the top end of the range, um, I believe we kind of traded 1214 on that last run we had earlier in the summer.
• 6:31
  SPEAKER_02: Earlier in the week we traded up to 1205.
• 6:33
  SPEAKER_02: It's gonna be interesting to see where we kind of go.
• 6:35
  SPEAKER_02: You know, we're in a weather market right now.
• 6:37
  SPEAKER_02: Next week is gonna be pretty important to kind of watch.
• 6:40
  SPEAKER_02: So um, you know, if you're not in that uh 40% sold area to 50%, you should be probably making some some more sales and kind of beefing that uh beefing beefing your sales up there a little bit.
• 6:52
  SPEAKER_02: Um, but as we kind of move forward, the market is definitely gonna be watching China and seeing where we're at on sales.
• 6:58
  SPEAKER_02: If they continue to be buyers there next week, I think we'll continue to see some upward movement.
• 7:02
  SPEAKER_00: Right.
• 7:03
  SPEAKER_00: Like Jordan said, guys, uh please feel free to reach out to us here at ProAg to go through any marketing strategies that we really like making some sales today and the and the time of the year makes sense as well.
• 7:13
  SPEAKER_00: Um, but look like Jordan was saying earlier, I I think the the grain markets will be looking at at weather here going forward.
• 7:20
  SPEAKER_00: Uh, are we gonna take some heat out here Sunday or not?
• 7:23
  SPEAKER_00: Um, do you have anything else to add here on the grain markets this week, Jordan?
• 7:26
  SPEAKER_02: Yeah, just a lot going on and you know, a lot to kind of look at.
• 7:30
  SPEAKER_02: So, you know, make sure you're calling, uh checking in.
• 7:33
  SPEAKER_02: I think uh those things are uh really good um time frames to kind of do that, right?
• 7:37
  SPEAKER_02: And you know, seasonally this is the time of year to be making some sales.
• 7:40
  SPEAKER_02: So we'll see what happens here as we kind of move uh through the weekend.
• 7:44
  SPEAKER_02: But you know, from what I saw this morning, the heat did kind of back off a little bit, you know, four to three degrees uh cooler than what they were kind of expecting.
• 7:53
  SPEAKER_02: And as you kind of move to the second half of July, you should kind of see some rains kind of come back in um behind this heat, is what we're seeing.
• 8:01
  SPEAKER_02: So we'll see what happens.
• 8:03
  SPEAKER_00: Thanks for watching, everyone, today.
• 8:05
  SPEAKER_00: Um, just a reminder Pro Egg does do a on the on the ground crop tour here at the beginning of August.
• 8:10
  SPEAKER_00: So be looking for that there.
• 8:12
  SPEAKER_00: Um, but other than that, I guess everyone have a good re weekend and look and please feel free to reach out with any questions.
• 8:18
  SPEAKER_00: Thank you.