The USDA sent the oilseed market soaring on Tuesday with the release of its May supply/demand report, which included the first estimates for 2016-17 ending stocks.
Old and new crop soybean futures spiked more than 50 cents/bushel, with the nearby July contract hitting the daily limit of 65 cents at one point. Soymeal futures finished at their limit after the department published much lower than expected soybean ending stock estimates.
2016-17 projected soybean carryout came in at 305 million bushels — about a 100 million bushels lower than the average pre-report trade guess. 2015-16 U.S. soybean carryout was pegged at 400 million bushels, down from 445 million in the April report and below trade expectations of around 425 million.
The soybean rally, likely combined with frost concerns in Western Canada, drove canola futures in Winnipeg higher, with the new crop November canola contract climbing almost $15/tonne.
Wheat futures were up slightly on the coattails of soybeans even though the report was bearish for wheat, with the 16/17 global ending stock estimate of a record 257.34 million tonnes coming in larger than expected. New crop carryout in the U.S. is expected to grow to 1.03 billion bushels, the highest since 1987-88.
The corn numbers in the report were seen as slightly bullish. New crop carryout in the U.S. is projected to grow to 2.15 billion bushels, up 350 million from the 2015-16 projection, but still lower than the trade was expecting.
We legit might see $11 beans this week, if you told me this two months ago I would have laughed in your face
— Matt (@hedgemonster) May 10, 2016
At this point it’s almost like you can’t afford to not rip your wheat up and plant it to anything else.
— Angie Setzer (@GoddessofGrain) May 10, 2016
— Brennan Turner (@BrennanDTurner) May 10, 2016
— Matthew Pot (@MatthewPot) May 10, 2016
— FarmLink Marketing (@FarmLinkCanada) May 10, 2016
Soybeans have big day post-USDA, but off limit move; beans up 54, meal up $20, corn up 11, wheat up 5, KC & MN up 3
— Arlan Suderman (@ArlanFF101) May 10, 2016