Today’s Spotlight Market
The following are pre-report estimates for the USDA Crop Production and Supply/Demand report
Corn production: 14.97 billion bushels vs. 15.153 billion bushels Aug.
Corn Yields (ave. per acre): 173.0 average vs. 175.1 Aug.
Soybean production: 4.105 billion bushels vs. 4.06 billion bushels Aug.
Soybean Yields (ave. per acre): 49.5 average vs. 48.9 Aug.
Fundamentals
While there is little doubt among traders and analysts that the U.S. is producing a bumper crop of both Corn and Soybeans, there is some debate as to the actual size of the crop this season. In the August Crop Production report, this is the first report of the season that takes into account actual field surveys, the USDA raised sharply its estimates for average yields to 175.1 bu. per acre for Corn and 48.9 bu. per acre for Soybeans. This in turn raised the bar for production to over 15 billion bushels for Corn and over 4 billion bushels for Soybeans both of which would be records if the government estimates prove accurate. However, some private forecasters believe the USDA may have been a bit too optimistic on the average Corn yields, especially following some private crop tours that reported ?disappointing? yields in some parts of the eastern Corn Belt. Unlike Corn, traders are expecting the USDA to raise its production estimates for Soybeans as near ideal weather in August was expected to benefit Soybean yields. While increased production is inherently bearish for beans, U.S. Soybean export demand has been excellent, which has helped to cushion any price slides tied to record production this season. The USDA Crop Production and Supply/Demand reports is scheduled for release today at 11 am Chicago time.????? ?
Technical Notes? -? View Today’s Chart
Today we will look at the new-crop Corn vs. Soybean spread with is normally 2 Corn vs. 1 Soybean. Here we notice that the spread has recovered from its lowest levels made back in late June with the rally stalling near the 300.00 Soybean premium. This is much closer to historical norms. The 14-day RSI confirms the spread has moved towards more neutral levels with a current reading of 43.49.? The next support level is seen at a 269.00 Soybean premium, with resistance found at a 339.00 Soybean premium.?
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