Corn estimates could bring 2018 cropping decision changes in Ukraine

2017/10/12 15:13:39

The highly respected USDA World Agricultural Supply and Demand Estimates Report (WASDE) reveals a corn demand decline sharp enough that some of Ukraine’s major producers are reportedly eyeing shifts in their 2018 cropping patterns. Discussing the “market mood,” analyst Brian Grossman said in part: “Starting off the 2017/18 market year estimates already on the bearish side as exports are expected to be down 445 million bushels from last year and even below 2015/16’s exports of 1.901 billion bushels."


The complete text of Grossman’s analysis of the world corn production and ending stocks situation was published by Born2Invest, Oct 12, 2017:

 

Has the paint fully dried on the corn market yet? It has definitely been dried as of recently with a calendar year range of only 344’2 to 417’2 failing to generated much interest or activity while providing horror for producers as profitable opportunities are hard to find.

 

Worse yet, market volatility has reached near record lows as December has traded a range of only 344’2 to 362’0 over the last 26 trading days with little producer optimism that prices will recover to a more palatable level to make sales. Not much different from this time last year as December was trading near 340 compared to the 350 hump that seems to have corn high centered. Unlike last year which was eventually able to recover to near 360 by mid-October, can a similar recover eventually happen again?

 

The September 2016 WASDE showed estimated corn ending stocks at a massive 2.384 billion bushels compared to September 2017’s 2.335 billion bushels with stocks to use ratio at 16.5% and 16.4%; respectively. The October 2016 WASDE report came in with slightly lower ending stocks from the September report at 2.320 billion bushels with a stocks-to-use ratio of 16.0%. Currently leading into the October 2017 WASDE; the average trade has estimated ending stocks to be near 2.289 billion bushels and assuming no change in demand, stocks to use ratio would come out at 16.0% as well.

 

From a balance sheet point of view, there isn’t much difference from this year to last year. Lower production has been mostly offset by lower demand as the global glut of grain continues to keep pipelines full and end users unconcerned while December corn struggles to break a daily range of more than 4 cents. The routinely volatile Quarterly Grain Stocks offered little market excitement as inventories came in lower than expected but still near a 30 year high and this October WASDE report too may come and go with little fan fair as large inventories will once again be posted, regardless of any changes the USDA may provide on either supply or demand.

 

Also similar to last year at this time is what I call the “mood” of the market. Starting off the 2017/18 market year estimates already on the bearish side as exports are expected to be down 445 million bushels from last year and even below 2015/16’s exports of 1.901 billion bushels. As exports accounted for 15.7% of the estimated 2016/17 demand; exports are now closer to 14.9% of 17/18’s estimated demand.

 

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https://born2invest.com/articles/corn- ... dates-production-weather/

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