June WASDE: Are new crop beans already being rationed?
USDA reported a winter wheat production forecast at 1.68 bil. bu. down 1% from May. The average yield is projected at 47.3 bushels per acre, down 0.3 bu. from May’s prediction. On the wheat balance sheet, old crop ending stocks have dropped from 768 mil. in May to 728 mil. in June. For the new crop, ending stocks have dropped from 735 mil. in May to 694 in June.
Due to the changes in trading hours on the commodity exchanges in the past month, this report from USDA was the first grain-related report to be released while the exchanges were trading. The CME Group’s Globex began its trading day at 5 p.m. yesterday and is underway through 2 p.m. today. Since the 7:30 a.m. Central time release of the USDA report would have been during the Globex session, the CME pushed ahead the opening of the open outcry session from 9:30 to 7:20 a.m. So with both trading systems underway, corn and beans both traded within a 20-cent range in the first several minutes, and wheat traded within a 14 cent range within several minutes after the release of the report.
USDA’s June Supply-Demand report was the first one ever released during the trading session of the CME’s Board of Trade, with expected volatility for corn and soybean prices. The balance sheet for new crop corn was left unchanged from May, and for old crop corn, only some minor adjustments were made in use, but none in the carryout. For soybeans the old crop is being consumed at a higher rate internationally, so USDA increased the export projection, and reduced the carryout at the end of August. But that reduced the supply available in the new crop marketing year, and the carryout in August of 2013 is already showing tendencies toward rationing.
Source: FarmGate blog