This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Corn and beans gave back some of their recent gains late in the week as traders position for the USDA May Supply and Demand update that comes out today, May 10th, at noon. Funds who were carrying big short positions into a growing season got spooked by damaging floods in Southern Brazil and too much rain in much of the corn belt to get the crop planted early. We cannot say that the US crop is late yet, but it is at least not early. This week and next are historically the busiest planting weeks. Market’s gave back some of the gains as it looks like a weather window will open up for at least some areas to get back into the fields before the next round comes through. The next few weeks will be very busy for data. We will get USDA’s May numbers today. Planting progress and condition ratings comes out on Monday. CONAB releases their updated production estimates on Tuesday and then the US planting progress again the following Monday. Market will also be closely watching weather both in the US and South America. Typically we are not watching Brazilian weather very closely this late in the year but due to the damaging floods in the Southern production region the market is paying attention.
In today’s USDA report, the market is looking for USDA to trim corn yield a half bushel from the Outlook conference to 180.5 compared to last summer’s yield of 177.3. With similar demand estimates, the average estimate for corn carryout is 2.28 billion bushels compared to this year at 2.12. They are looking for bean yield to be estimated at 51.9 compared to 50.6 last summer. Market is anticipating a new crop bean carryout of 436 million bushels compared to 340 this year. The market is looking for USDA to finally lower Brazilian bean production by 2.8 million metric tons and drop corn production by 1.8 million metric tons. Market expects next year’s corn world carryout to shrink just a little from this year and beans just slightly higher.