Agricultural News
Tom Leffler Analyzes Acreage and Stocks Report
Mon, 30 Jun 2014 18:57:48 CDT
The latest set of reports from the US Department of Agriculture caused grain markets to take a tumble on Monday. Traders had their eyes on the ending stock reports report anticipating a very low number for soybean stocks and instead it was the latest acreage report that moved the market. USDA estimated soybean acres at 84.839 million acres.
Following the close of the markets Monday afternoon, Tom Leffler of Leffler Commodities told the Radio Oklahoma Network that the soybean acreage estimate took traders by surprise as that number was more than 2.7 million higher than the highest trade estimate.
"This is 8.3 million acres than we planted last year, so that was a much, much more negative number than anyone was looking for," Leffler said.
The biggest soybean acreage increases were found in North Dakota, Minnesota, Nebraska and Iowa, Kansas and Illinois.
The corn acreage was a little lower than expected with 91.64 million acres. Leffler says that number was not out of range with the estimate was only 50 thousand acres less than the March first planting attentions report. The estimate is 3.7 million acres less than the June 2013 national corn acreage estimate.
All wheat acres came in at 56.47 million acres. Leffler says that was 656 thousand acres more than what traders were estimating. That is an increase 659 thousand over the March estimate with the biggest increase came from spring wheat with 12.709 million acres.
"That's negative for the wheat, because that means there is going to be more high protein wheat out there available with those spring wheat acres in the north country," Leffler said. "That will compete against our Kansas City wheat, which we raise here in the southern plains, the hard red winter wheat."
The biggest surprise out of the grain stock report, surprisingly came from corn. Leffler says corn stocks came in at 3.854 billion bushels. That's almost 1.1 billion bushels more than we had a year ago this June.
"You put this all together - the combination of acreage and the stocks number without anything really being price friendly in there," Leffler said. "That's why we saw the big downside today in our grain complex."
Going forward, Leffler looks for the acreage and stocks reports to have bearing on the market for a while, until something else major changes. He looks for the market to hold down commodity prices at these lower levels.
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