WADSE Supply & Demand Report Recap

 

cb45f12bbbf31c727e9f5573e5e202a6.jpg

Screenshot 2018-05-11 10.20.18.png

 

 

Corn 

May Corn finished unchanged at 394 3/4, 5 off the high and 1 1/2 up from the low.

July Corn closed down 3/4 at 402. This was 2 up from the low and 5 off the high.

Screenshot 2018-05-10 18.51.45.png

10/5/2018 US Corn Production

The May USDA Supply & Demand report was considered bullish with U.S. ending stocks for the new crop 2018/2019 season pegged at 1.682 billion bushels from trade expectations at 1.631 billion bushels with a range of 1.411 to 1.907 billion. Old crop ending stocks came in at 2.182 billion bushels from trade expectations for 2.176 billion bushels and compared with the April estimate of 2.182 billion.

World ending stocks for the 2018/2019 season came in at just 159.15 million tonnes from trade expectations for 183.6 with a range of 165 to 193.8 million tonnes. World ending stocks for the 2017/2018 season came in at 194.85 million tonnes from trade expectations for 194.8 million tonnes with a range of 185 to 198 million tonnes.

Argentina production came in at 33 million tonnes from expectations for 32.2 million tonnes (31-33 million) and from 33 million tonnes last month.

Brazil production came in at 87 million tonnes from expectations for 88.6 million tonnes and from 92 million tonnes last month.

The huge drop in world ending stocks is a bullish factor and leaves the world stocks/ usage at just 14.5 % from 18.5 % this year and 21.8% last year. This will be the second “tighest” world stocks/usage since the 1973/1974 season and leaves new crop corn very sensitive to any weather which might lower yield.

Net weekly export sales for corn came in at 695,600 tonnes for the current MY and 90,000 for the next MY for a total of 785,600 tonnes. As of May 3rd, cumulative corn sales stand at 91.4% of the USDA forecast for 2017/2018 (current) marketing year versus a 5-year average of 89.1%. Sales of 283,00 tonnes are needed each week to reach the USDA forecast.

Technical Outlook

CORN (JUL) : Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near-term support is penetrated.

The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market could take on a defensive posture with the daily closing price reversal down.

It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is now at 395 3/4. The next area of resistance is around 405 1/2 and 409 3/4, while 1st support hits today at 398 1/2 and below there at 395 3/4.

 

F-ZCN8.png

 

Soybeans

May Soybeans finished up 6 at 1013 1/4, 4 3/4 off the high and 6 up from the low.

July Soybeans closed up 5 1/2 at 1021 1/4. This was 7 up from the low and 12 1/2 off the high.

July Soymeal closed up 0.3 at386.1.. This was 2.2 up from the low and 5.8 off the high.

July Soybean Oil finished uo 0.1 at 31.13, 0.03 off the high and 0.23 up from the low.

Screenshot 2018-05-10 18.51.45.png

The May USDA Supply & Demand report was considered bullish with U.S. ending stocks for the 2018/2019 season coming in at 415 million bushels as compared with trade expectations near 533 million bushels ( range of 342-744 million).

Ending stocks for the old crop season came in at 530 million bushels from expectations at 546 million bushels ( range of 495-618 million) and compared with 550 million last month.

Argentina soybean production was pegged at 39.0 million tonnes vs. trade estimates at 38.4 million tonnes ( range of 36-40 million) and compared with the USDA last month at 40 million tonnes.

Brazil production came in at 117.0 million tonnes from expectations at 116.3 million tonnes ( range of 114.90 to 119.0 million) and compared with 115 million last month.

World ending stocks for the 2018/2019 season came in at 86.7 million tonnes from trade estimates for 91.2 million tonnes ( range 82.5 to 97.0 ) as compared with 92.2 for the 2017/2018 season.

Both U.S. and World ending stocks for the 2018/2019 season came in well below estimates and will provide a bullish backdrop into the U.S. growing season.

The Brazilian and Argentine production estimates were basically right on the estimates and are already factored in. The other slightly bullish development is that China’s 2017/2018 imports were left unchanged at 97.0 million tonnes and the 2018/2019 soybean imports are at 103 million tonnes.

Net weekly export sales for soybeans came in at 354,000 tonnes for the current marketing year and 278,300 for the next marketing year for a total of 632,000.

As of May 3rd, cumulative soybean sales stand at 98.1% of the USDA forecast for 2017/2018 (current) MY vs. 5 year average of 96.3%. Sales of 62,000 tonnes are needed each week to reach the USDA forecast.

There were 90,000 tonnes of old crop soybeans canceled for unknown destinations, but there were also 183,000 tonnes of new crop sales reported to unknown. There were also reports today that six cargoes of soybeans were being held at a port in China for CIQ inspections while Brazilian cargoes were being put through without delays.

Net meal sales came in at 90,900 tonnes for the current MY and -600 for the next MY for a total of 90,300. As of May 3rd, cumulative soybean meal sales stand at 89.5% of the USDA forecast for 2017/2018 (current) MY vs. 5 year average of 86.0%. Sales of 55,00 tonnes are needed each week to reach the USDA forecast.

Net oil sales came in at 45,400 tonnes for the current marketing year and 1,000 for the next marketing year for a total of 46,400. As of May 3rd, cumulative soybean oil sales stand at 92.8% of the USDA forecast for 2017/2018 (current) MY vs. 5 year average of 75.6%. Sales of 3,100 tonnes are needed each week to reach the USDA forecast.

Technical Outlook

SOYBEANS (JUL) : Momentum studies are declining, but have fallen to oversold levels.The close below the 9-day moving average is a negative short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The next downside objective is now at 1003 1/4. The next area of resistance is around 1031 and 1042, while 1st support hits today at 1011 1/2 and below there at 1003 1/4.

F-ZSN8.png

SOYMEAL (JUL): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target

is now at 379.0. The next area of resistance is around 390.0 and 395.0, while 1st support hits today at 382.1 and below there at 379.0.

F-ZMN8.png

SOYBEAN OIL (JUL) 05/11/2018: Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The market now above the 18-day moving average suggests the intermediate-term trend has turned up. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside target is at 31.33. The next area of resistance is around 31.25 and 31.33, while 1st support hits today at 31.00 and below there at 30.82.

F-ZLN8.png

 

 

Wheat

May Wheat finished down 6 3/4 at 507 3/4, 8 off the high and equal tto the low.

July Wheat closed down 4 at 506 1/2. This was 6 1/4 up from the low and 8 1/2 off the high.

 

Screenshot 2018-05-10 18.51.45

The USDA May Crop Production and Supply/Demand report was considered slightly bearish with US ending stocks for the 2017/18 season coming in at 1.070 billion bushels from trade expectations at 1.068 billion bushels.

The 2018-19 ending stocks came in at 955 million bushels vs trade expectations near 932 million bushels with a range of 780 million to 1.070 billion bushels.

World ending stocks for the 2018/19 season are pegged at 264.3 million tonnes vs expectations at 269.18 million tonnes (range was 260 to 279.3 million).

Old crop world ending stocks were revised to 270.5 million tonnes from expectations for 271 million tonnes.

US All Wheat production for the 2018/19 season was estimated at 1.821 billion bushels from trade expectations for 1.774 billion bushels (range of 1.612 to 1.860 billion) and compared with 1.741 billion bushels for this past season.

The class breakdown had hard red winter at 647 million bushels versus the average estimate of 637 million bushels (540- 737 million range) and 750 million bushels last year.

Soft red winter came in at 315 million bushels versus the estimate of 309 million bushels (218-330 million range) and compared to 292 million bushels last year.

White winter came in at 229 million bushels versus the estimate of 230 million (201-260 million range) and compared to 227 million last year.

 

The US wheat production came in above estimates and is pressuring the market. World ending stocks did come down to the lower end of expectations and is a positive development. The US weather continues to show ample moisture for the winter wheat areas and this is also a bearish factor.

Today’s weekly export sales for wheat were disappointing coming in at 35,200 tonnes for the current marketing year and 48,200 for the next marketing year for a total of 83,400. As of May 3, cumulative wheat sales stand at 93.5% of the USDA forecast for 2017/2018 (current) marketing year versus a 5 year average of 97.8%. Sales of 394,000 tonnes are needed each week to reach the USDA forecast.

SovEcon estimated the 2018-19 Russian production at 78.2 million tonnes versus 77.4 million previously. IKAR estimated 2018-19 Russian wheat production in a range from 72.0 to 80.3 million tonnes which was slightly higher than their previous estimate. The USDA pegged Russian 2018-19 wheat production at 72.0 million tonnes compared to 85.0 million in 2017-18.

Technical Outlook

WHEAT (JUL) : Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The market’s short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside objective is now at 492 1/2. The next area of resistance is around 513 3/4 and 521 3/4, while 1st support hits today at 499 1/4 and below there at 492 1/2.

F-ZWN8.png

 

 

Source:

Brugler Marketing & Management, LLC

USDA

CME Group

FOAA

CFTC

Farmlead

-R.W.N II

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.