ANALYSIS - The US Department of Agriculture on Thursday raised slightly its projected ending stocks figures for corn and soybeans, while slightly lowering wheat stocks, as of the end of their marketing years in 2014, writes Jim Wyckoff, grains analyst.
However, traders quickly digested the USDA news and have returned to focusing on the hot and dry weather forecasts in the U.S. Corn Belt, which could begin to threaten yield potential for corn and soybeans.
USDA said US corn carryover as of August 31, 2014 will total 1.959 billion bushels versus 1.949 billion in last month’s forecast. The latest estimate for corn stocks was above the pre-report average of forecasts.
Soybean stocks will total 295 million bushels at the end of next summer, compared to 265 million in last month’s forecast. The soybean stocks figure was also above trade expectations. Wheat stockpiles at the end of May 2014 came in below market expectations, at 576 million bushels, compared to 659 million in USDA’s previous projection.
Weather models still support a building high-pressure ridge over the central US setting up by the weekend, which would ramp up temperatures and block moisture out of the Corn Belt. This bullish weather forecast is limiting the selling interest in the wake of the somewhat bearish USDA data for corn and soybeans Thursday.
With much of the US corn crop being planted late, the key pollination stage of plant growth will now occur during the mid-to-late-July timeframe, which is typically the hottest part of the summer. Temperatures above 90 degrees during pollination can stunt yield potential for the corn crop.
TheCattleSite News Desk