Aug 14, 2020
We had some higher markets this week due to decent responses to the WASDE on Wednesday and then the aftermath from the FSA data dump on Wednesday afternoon. Between the two events, CZ20 rallied 19 cents on the high and is currently hanging out around 15 cents higher than the 10:50 am low on Wednesday. Beans simply entered BEAST MODE and traded 34 cents higher from the WASDE low to yesterday’s high and are still 26 cents higher to start the morning session.
The FSA data is probably more complex than this newsletter should be so let us touch on what we know:
The data is very far behind.
The number of Prevented Plant acres were slightly bigger than the market expected, and the PP in the South was interesting.
You can interpret the data to get anywhere between 85 and 92 million acres for Corn depending on how you want to look at the data/manipulate data. For beans, it can come in anywhere from 77 million to 84 million acres.
WASDE is not going to account for the data until Oct.
The market does not really have anything else to trade for the next month.
I think the data probably implies a bit of a loss for both corn and beans – call it maybe -1 million acres but hard to really get any confidence until the next round of data next month.
As much as we would like there to be this major story that will lead us to the promised land I just don’t think it’s going to happen, it is hard to believe producers would leave ground untouched without taking PP / enrolling in the government programs.
So that’s the view – enjoy the rally – not sure it’s going to sustain as reports look better and better for both corn and beans out of Iowa