We have the WASDE update later this morning, but generally speaking I don\u2019t expect many fireworks.\u00a0 Here is a quick rundown of items to watch:<\/p>\n
I don\u2019t think there is going to be much to get excited about in terms of the wheat numbers today.\u00a0 The US balance sheet will probably hold very little change.\u00a0 As noted yesterday, I believe there is an argument to be made for a higher export figure than the 975 mil bu WASDE is currently carrying.\u00a0 It seems the average guess is somewhat baking this in with their call for a 10 mil bu reduction in ending stocks.\u00a0 This seems reasonable to me, but I would note that we should also be prepared to see WASDE wait and see on exports.\u00a0 With other categories unlikely to change, it is possible we get no change in ending stocks.\u00a0 I don\u2019t think that would be a market-moving difference vs. the average guess, however.<\/p>\n
I don\u2019t see any major changes in the world numbers forthcoming either.\u00a0 I know some are upping their Indian wheat import figures, but WASDE already posted a small increase last month and I think they\u2019ll sit there for now.\u00a0 Overall, don\u2019t look for any fireworks today from wheat.<\/p>\n
The average guess calls for an 8 mil bu reduction to carryout from last month\u2019s 420 mil bu.\u00a0 I\u2019m not exactly sure where this is supposed to come from.\u00a0 Export demand has been solid, but as of now it would not imply anything greater than the WASDE projection (2,050 mil bu) and some are starting to argue for a lower<\/em> figure.\u00a0 Crush demand is unlikely to be raised either.\u00a0 Note meal exports continue to disappoint.\u00a0 While a reduction in meal exports could be funneled into domestic disappearance, it certainly doesn\u2019t appear that the market needs more product.\u00a0 Imports are unlikely to be changed either.\u00a0 So, I\u2019m at a loss to see where the average guess thinks demand will be increased.\u00a0 Still, my expectation for the balance sheet to be left entirely alone shouldn\u2019t provide any spark to prices.<\/p>\n It is highly likely that WASDE lowers their Argentine production forecast today and perhaps the average guess is assuming that might prompt WASDE to increase US exports?\u00a0 I somewhat doubt that.\u00a0 I think part of the lower production will be offset simply by lower Argentine stocks and WASDE also likely needs to raise their Brazilian export projection.\u00a0 This all adds up to potentially lower world stocks, which the average guesses are calling for.\u00a0 However, keep in mind this doesn\u2019t account for a potential increase to Brazilian production.\u00a0 Right now most are expecting that to remain unchanged at 104 mmt, and I agree.\u00a0 However, it is possible we could see an increase.\u00a0 Remember Conab will be out early this morning with a production estimate update.<\/p>\n At the risk of sounding like a broken record, I don\u2019t really expect a lot of change from WASDE here today.\u00a0 The average guess calls for a 20 mil bu reduction in carryout, and I can get behind that I suppose.\u00a0 Certainly most are penciling in larger ethanol grinds than the current WASDE projection of 5,325 mil bu.\u00a0 Matching this projection would require a monthly corn grind of roughly 431 mil bu going forward, which would essentially match the average pace seen from Feb-Aug last year.\u00a0 Right now it would be hard to argue that we won\u2019t exceed this pace, so an increase in the ethanol grind is likely.\u00a0 The average guess calls for a 20 mil bu reduction in carryout, though I would caution the increase could be as much as 50 mil bu.\u00a0 I think there is also a case to be made for a potential increase to export demand, but I think WASDE can sit where they are for now.\u00a0 IF they were to raise both ethanol and exports today, it is likely they\u2019d cut F&R a little as a partial offset.<\/p>\n In the world numbers, again South American production will be the key focus.\u00a0 I think it is probable WASDE lowers their Argentine production figure but raises their Brazil production total by a similar amount.\u00a0 This will likely result in minimal change to global production.\u00a0 Brazilian corn imports need to be increased and exports decreased, but this probably doesn\u2019t result in much change to their bottom line.\u00a0 I can\u2019t think of anything else right now that is likely to be changed.\u00a0 The average guess calls for a minor reduction in global carryout, and I find myself in agreement.<\/p>\n The bottom line here is that we\u2019re not likely looking at any \u201cwholesale\u201d changes in today\u2019s numbers.\u00a0 Even if we do have some misses vs. the average guesses, it\u2019d have to be something pretty shocking to change the overall market sentiment.<\/p>\n DISCLAIMER<\/u><\/strong>:<\/strong> Grains – We have the WASDE update later this morning, but generally speaking I don\u2019t expect many fireworks. Here is a quick rundown of items to watch:<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[],"yoast_head":"\nCorn<\/h3>\n
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