Now that the calendar has turned to June, we will start to see positioning for the updated acreage and stocks reports that will be released at the end of the month.

The most interest heading in to this release will likely be on acres. The general consensus is we will see higher soybean plantings than what were published in March.

A few analysts are already disputing these numbers though as planting has yet to conclude in some regions of the Corn Belt.

Much of the debate in acreage this year has focused on the high corn number, but there is another factor gaining attention – the number of acres that may be double-cropped.

Given current market economics, it would not be surprising to see a larger volume of double-cropping this year following wheat harvest. How favorable weather is when we get to this point will be a determining factor in how much double-cropping does take place.

While acreage adjustments at the end of the month will primarily be a factor for new crop contracts, grain stocks will impact both crop years. Not only will these updated numbers answer some of the demand questions we have been hearing, but give us a clearer indication of what old crop ending stocks will total.

In turn, this will impact new crop carry-in and balance sheets as well.

We are starting to see some doubt cast over the current soybean demand numbers being forecast by the USDA. Even though soybean exports have been strong this year, crush has started to trail expectations.

Not only do some economists believe this will alter old crop balance sheets, but it brings into question the 3.925 billion bushel new crop soybean demand figure as well. The likelihood of elevated acres and a possible better-than-trend yield is adding to balance sheet questions.

The real unknown in the soy complex is the global numbers, mainly those in Brazil. Brazilian farmers are receiving record values for both old and new crop soybeans at this time, and this could easily lead to elevated new crop production.

Brazil is currently forecast to expand soybean production by 3 percent this coming year, but the actual number may be closer to 8 percent or even10 percent. While this seems large it would be just enough to hold world soybean reserves steady though, as demand has been steadily increasing as well.

Trade is receiving the greatest mixed signals on Chinese soybean demand. Soybean crush for the 2016/17 marketing year is forecast to increase 6.4 percent from the previous marketing year. While this is higher, it is the smallest growth rate in four years.

Elevated use of distiller’s dried grains and lower feed demand are the causes of the reduced soybean crush.

More attention is being paid to the increase we have seen in world demand for U.S. corn. Export sales have increased in recent weeks as U.S. corn has, at times, held a 26-cent-per-bushel discount to other sources.

This is mostly in response to logistic issues that have prevented other countries from shipping inventory. Normally this demand would elevate corn values, but the fact this demand may be short lived is limiting market response.

The state of the global economy remains a significant factor in commodity market direction. Right now, the greatest interest is on China.

China has imposed stricter regulations on how many positions a speculator can hold as this activity has greatly over-inflated China’s economic outlook. There are now concerns that the stability of China’s economy is not as great as earlier thought.

For the first time in several years, very little abnormally dry soil is being reported across the Corn Belt. This does not mean that a drought cannot build, but it would take time to build.

As a result, there is less risk premium than normal in the futures market at this time. Traders feel confident they can quickly add it later on if needed.

Karl Setzer is a commodity trading advisor/market analyst based in the West Bend office of MaxYield Cooperative. He can be reached at (800) 383-0003.

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.