MarketsFarm — Fresh news out of U.S./China trade talks will move the soybean and corn markets in the near future, rather than USDA’s next world agriculture supply and demand estimates (WASDE), according to an analyst following the Chicago Board of Trade.
However, a lack of fresh news regarding those trade talks has become a problem on the markets.
“What you hear is things are going well. That’s all being said right now, but we don’t have any details. This week so far, things have been really quiet,” said Steve Georgy, president of Allendale Inc. at McHenry, Ill.
Negotiations between the world’s two largest economies remain ongoing with hopes pinned on a final deal by the end of March. So far concrete details have been almost nonexistent.
As for the next WASDE report from the U.S. Department of Agriculture, scheduled to be released Friday, Georgy cautioned there likely won’t be a lot of changes in it compared to the February report.
There very likely are large carryovers of soybeans and wheat, but corn supplies should be tighter, he said. The February WASDE noted U.S. soybean carryover at 24.76 million tonnes and global carryover at 106.72 million tonnes.
Those soybean numbers will mean Brazil’s harvest won’t have much of an effect on the markets, Georgy said.
“The U.S. just had a massive (soybean) crop. The global supply of soybeans still is increasing. We are not short of beans anywhere,” he commented.
Estimates of Brazil’s crop, currently being harvested, are 115 million to 117 million tonnes — three to five million tonnes below the previous year’s crop, he noted.
The global wheat carryover was at 267.53 million tonnes, which Georgy said, “was still a big pile of wheat.”
The U.S. wheat carryover was at 27.5 million tonnes.
As for corn, U.S. carryover was at 44.08 million tonnes and global carryover at 309.78 million tonnes, which Georgy said was on the tight side. But he doesn’t expect that to move the price of corn on the markets.
“It’s hard to get excited about corn if beans don’t rally too,” Georgy said.
— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.