We here at Allied Cooperative are excited to welcome our Grain Division to Breaking Ground, and we look forward to hearing more from our grain experts in the future!
The biggest surprise in the USDA supply/demand revisions report (World Agricultural Supply Demand Estimate) that came out Wednesday was the lack of revision – especially in corn acreage. There were no changes to the planted acres. I’m sure you and I both think they should have cut planted acreage. However, the last three times the USDA cut the planted acres in the June report, they were forced to make upward revisions several weeks after. This may be what convinced them to just leave it alone despite the obvious and historically slow planting pace this spring.
The net impact of the report was a slight reduction of 2013/2014 ending stocks of 55 million bu to 1.949 billion bu. That’s how many bushels no one wants and that’s still a large number. It’s the biggest since 2005/2006. We may not like to hear it, but if improving crop conditions are seen, new crop prices could still work lower. December $5.50 futures should be seen as a selling opportunity. Let’s put our focus on the weather and the acreage report which will be out in several weeks to see how much the USDA cuts corn acreage. Remember, it will take a significant reduction in acres to bring down this burdensome carry out – especially if crop conditions improve.
– Rich Dahlke, Grain Merchandiser