With the month of March coming to a close, there were several U.S. Department of Agriculture (USDA) reports that are worth noting. Farms.com Risk Managment has put together a summary of these reports, including Hogs and Pigs and Quarterly Grain Stocks Planting Intensions. Moe Agostino, Chief Commodity Strategist, Farms.com Risk Management weighs in on the reports.
USDA Hogs and Pig Report
The release of the Hogs and Pigs Report was highly anticipated, especially with the presence of the Porcine Epidemic Diarrhea Virus (PEDv).
The USDA reported U.S. inventory of hogs and pigs to be at 62.9 million, down three per cent from a year ago, while market hog numbers were reported at 57 million head, which was down four per cent from the last report.
Agostino says the farrowing intensions at 103 were the “big surprise” in the report, adding that these are pigs that have survived PEDv, and will be ready for market between May and July, but not suggesting the marketing hole that everyone was anticipating. The credibility of this report will be in question, as the report did not accurately take into account PEDv losses. The USDA will likely lower pork production projections in the April WASDE report.
March Quarterly Grain Stocks Planting Intentions Reports
The release of today's reports is not considered a “market moving” report. It is slightly bullish.
“The 2014 USDA March Quarterly Grain Stocks and Planting Intentions reports came in within expectations and is considered neutral to friendly,” said Agostino.
See chart below for projections:
2014 USDA MARCH PLANTING INTENTIONS REPORT ESTIMATES
COMMODITY | USDA ESTIMATES | AVERAGE ANALYST ESTIMATES | RANGE OF ESTIMATES | USDA AG OUTLOOK FORUM ESTIMATES | LAST YEAR |
CORN | 91.7 | 92.7 | 92.0 – 93.5 | 92.0 | 95.3 |
SOYBEANS | 81.5 | 81.0 | 80.0 – 81.5 | 79.5 | 76.5 |
WHEAT | 55.8 | 56.2 | 56.0 – 57.0 | 55.5 | 56.1 |
TOTAL | 229.0 | 229.9 | N/A | 227.0 | 227.9 |
2014 USDA MARCH QUARTERLY GRAIN STOCKS REPORT ESTIMATES
COMMODITY | USDA ESTIMATE | AVERAGE ANALYST ESTIMATES | RANGE OF ESTIMATES | DEC. 1, 2013 STOCKS | MARCH 1, 2013 STOCKS |
CORN | 7.006 | 7.099 | 6.80 – 7.54 | 10.430 | 5.400 |
SOYBEANS | 0.992 | 0.989 | 0.98 – 0.99 | 2.148 | 0.998 |
WHEAT | 1.055 | 1.042 | 1.038 – 1.048 | 1.463 | 1.235 |
Agostino makes note of some of the key drivers, one is the drought conditions in the United States and the second is the political situation in the Ukraine. He says to watch for the dry weather in the southern plains and identifies what he calls the “Putin risk premium,” adding that he predicts that the tensions will escalate. On the Ukraine front, countries that buy wheat typically from the Ukraine or the Black Sea region will be looking to places elsewhere like the United States.
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