Have you ever heard of a curveball in baseball? I’m not much of an athlete, but I still know that a “curveball” is not always a good thing. The USDA updated their Quarterly Stocks and Acreage reports on Thursday this past week. The Quarterly Stocks and Acreage report on June 30th is one of the most influential reports during the year and can have an impact on market direction. We’ve been on the edge of our seats in anticipation of this report with many of the opinions being “just get it over with”. Thursday’s report was another example of getting thrown a curveball, just when we least expected it. Many were of the opinion that we would be chewing on a much larger soybean acre number and fewer corn acres. Let me remind you that there is no forecasting what they will actually come up with and whether we agree or disagree; they have an impact on the market.
We’ve all either seen the pre-report estimates, heard some sort of analysis afterward, or watched how the markets ended for the week, so I’m not going to go into all the details of each report. In a nutshell, we are now trying to digest a very large corn acre number at 94.15 million acres (up 7% from the estimates report in March). This is the 3rd largest corn acre number since 1944. Although soybean acres didn’t increase like most in the trade thought, if realized, the soybean acre number will be record breaking this year. Besides acres that were actually planted, yield will also have a significant influence on final production. There is still plenty of time for the USDA’s yield projections to be changed, which could be for the better or worse. Only time will tell.
This week was a good reminder for me not to read too much into one news item. There are so many factors that influence the market and just as we focus on only one item, something else pops up out of nowhere. It’s easy to get caught up in the current news and influences to the market, especially if everything we hear or read is biased toward one direction. Weather still has a chance to work in our favor or it can keep us in an unfriendly predicament. No matter what happens over the next few months, stick to your plan! This is a tough lesson for me to follow myself sometimes, especially when emotions get in the way. However, it’s one of the most important things to remember. I witnessed many instances where we beat ourselves up last year by making a bunch of emotional changes to our marketing plans, and it’s biting us again this year. We can’t go back a few weeks to make sales, but we can strategically place our next targets and deadlines for future sales. If you are looking for ways to get back on track, call your ProEdge Grain Specialist or Risk Management Consultant.
If you would like to see more specific details about the recent USDA reports, check out the ProEdge Update here.