There were some bearish implications in this morning’s Supply and Demand report from the Ag Department. USDA says soybean and wheat exports will likely slow down in the face of global competition.
USDA says soybean exports will dip because of strong competition from South America. As a result, the soybean stockpile at the end of the current marketing year will be the largest in five years – and 18 percent higher than last month’s estimate. The soybean stockpile was pegged at 230 million bushels, wheat at 878 million bushels, and corn at 848 million bushels.
During a conference call hosted by the MGEX Friday morning, Ceres Hedge Senior Analyst Jonah Ford told reporters that given the report’s numbers – corn may be a more attractive option in the acreage battle next spring.
Ford thinks CBOT corn and wheat will be closely matched in price going forward. He also feels confident about the spring wheat market’s ability to maintain a price advantage over lower quality supplies. Meanwhile, Ford thinks the recent market volatility in the wheat and corn should ease over the winter.
USDA’s next estimate on this year’s supply and demand numbers will come out in January. Veteran market analyst Gary Wilhelmi isn’t expecting any big changes in next month’s numbers.
And – Wilhelmi says the U.S. faces stiff competition from Black Sea suppliers, too.
USDA says world wheat production will be a record 689 million tons, up six percent from the previous crop.