The USDA May crop report contained nothing to move the market needle. That was one of the takeaways for Arlan Suderman, Chief Commodities Economist for INTL FCStone Wednesday afternoon. The futures markets didn’t do a lot after the report other than a small bounce for corn and a few cents reversal in soybeans.
“Corn remains rangebound up 6 cents Wednesday, and still within the range,” he said just before trade wrapped up for the session. “You look at soybeans and we went up to the top of the channel, an ascending channel granted, but we went up to the top of the channel and immediately went back down. The funds are trading chart signals here and there is nothing to focus them on the fundamentals.”
Suderman said what grabbed his eye in the corn report was the big drop in global stocks for the new marketing year.
“Overall, we saw global corn stocks fall by 30 million metric ton, but 20 million metric ton of that was in China. We had a big adjustment in China, the rest of the world not so much. However, things are getting a little bit better, they’re less bearish than what they were.”
While soybean numbers weren’t bullish for that market, he says it was a report that offers some optimism.
“Soybean stocks both domestically and globally are starting to improve a little better than expected. Now, new crop domestic stocks are getting bigger, but not at the pace that was expected and the trade expects those to get smaller. We still have ample supplies,” he added, “but overall I think we saw a little bit of a sigh of relief that we didn’t see a 5 in front of the ending stocks number and we have room to bring that down.”
Suderman added USDA might have been a little too aggressive with its soybean domestic demand estimates, although they might be a little pessimistic with the global demand estimates.
Get all the numbers from the WASDE report here.