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NW Indiana | I'm going to lay out the numbers for you guys and throw in some of my opinions. Some of the follow may indicate im bearish or bullish but that is just what the fundamentals are telling me.
Winter wheat acres declining approx. 3.8 million. Corn planted in 2016=94 Soybeans planted=83.4 Cotton planted 10.1 Sorghum planted 6.7 for a total of 194.2. Lets assume all other planted acreage remains the same even though we all know there will be some minor shifts.
So 194.2+3.8= 198 acres available for corn, soybeans, cotton and sorghum. Lets assume PP is closer to the historical avg which is about 2 million higher than 2016. Lets give Cotton a large percentage increase to 11.1(most planted in the last 3 years). Lets drop Sorghum to 6.4(could be lower??). So that leaves 178.5 left for corn and soybeans.
With last years RMA prices of 3.86 corn and 8.86 soybeans we ended up with 94/83.4 or a total of 177.4 which is 1.1 lower than the above estimate for 2017.
After today's report I'm not changing my corn estimate for RMA which was about 3.80. I will raise my previous soybean estimate stating under 9.50, now I will raise it to 9.75.
I think with the prices we have had lately with many being smart and locking in some soybean coverage along with the higher RMA price we end up around 91.5 corn and 87 soybeans.
Lets plug those numbers into a WASDE
Trend yields(despite jon predicting a drought) should be around 171 and 49
So corn 171x83.75(harvested) is 14.321 billion production. With 2016 demand of 14.585(we picked up a bunch of exports from brazils drought) lets leave that alone to assume some growth otherwise. So with that ending stocks would drop 264 million down to 2091 billion. Is that bullish or bearish? I let you decide
Soybeans 49x86.3(harvested) is 4.228 billion production. With 2016 demand of 4.108(with demand growing about double normal yoy growth) SA looking to produce 200+ million more bushels yoy lets just raise our demand a pinch to 4.150. That would be an increase in ending stocks of 78 million up to 498 million. Is that bullish or bearish? I let you decide
Sorry wheat guys I don't grow any | |
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The numbers......
