Grains –
Stream of consciousness thoughts today:
- As expected, WASDE lowered their meal production and increased their soyoil production despite no change to the overall soybean crush figure. Meal yields have not been solid to start the year, and despite the reduction I suppose it is still possible we will need to see further reductions in their yield estimate going forward. I could make an argument they might be a little too light on their yield still. So, the bottom line is we might have further downside to meal production and upside to oil production even with an unchanged crush. NOPA is out on Tuesday, and this will be something to watch in those figures. Additionally, I do wonder if WASDE might be a bit light on domestic meal demand while too high on soyoil exports. I think this is shaping up for potential loosening of the oil balance sheet while meal supply/demand appears static at worst. I’ll be watching the oilshare trade closely, as oil product value appears historically elevated and could be vulnerable.
- In case you were wondering, there is no strong tendency in any direction on what winter wheat area projections do from here. A breakdown of the recent history is attached in the chart, and as you can see there isn’t much of a bias here.
- It is interesting to see soybean on-farm stocks represent such a small percentage of the total. The chart is attached below. Perhaps it is a meaningless statistic, but I do find it interesting. I suspect it means that the US farmer has been a willing seller of soybeans up to this point in the year leaving a larger share of stocks in the commercial’s hands. That begs the question to what degree might commercials need to “push” for beans later in the season? On-farm corn stocks as a percent of the total seem inline with recent years.
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