Report Numbers May Shuffle Planting Decisions

In February’s USDA World Agriculture Supply and Demand Estimates Report (WASDE), domestic corn ending stocks fell to 2.352 billion bushels, U.S. soybean ending stocks climbed to 530 million bushels and wheat ending stocks here in the states were raised to 1.009 billion bushels.

For U.S. soybeans in particular, this was the 3rd straight WASDE report with a negative tinge and Mike Zuzolo with Global Commodity Analytics says some new factors may have farmers taking a second look at what they plant in 2018.

“This report took demand up in corn and down in soybeans and that all falls into your cash basis levels,” said Mike Zuzolo of Global Commodity Analytics. “USDA added 125 million bushels of corn demand and took away 60 million bushels of bean demand. This is where the February WASDE report is going to be negotiated out when it comes to prices.”

Zuzolo suggests that the futures market will continue to play the weather in South America and other factors, including currencies and outside markets. He thinks cash basis will find a much more firm tone in the corn market and a more difficult tone and a weaker basis in the soybean market.

“Crush margins for March are still running at almost $1.20 a bushel in soybeans so if you are located near a processor your basis may actually hold up pretty well, but other than that I think you can expect weaker soybean basis going forward,” Zuzolo said. “This report would suggest to me that market is going to need more corn acres in 2018.”

Source: Morning Ag Clips

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