The May position report was released today, with 143.7 million lbs. shipped, compared to 131.6 million lbs. last year and the record 145.4 million lbs. shipped in May 2012. Domestic shipments were at 54.6 million lbs., just surpassing last May’s record 54.3 million lbs. Export shipments were at 89.1 million lbs., up from last year’s 77.2 million lbs., but slightly behind 2012’s record 91.7 million lbs. Total shipments for the year are at 1,652.1 million lbs., up 4.69% over last year.

Sales for the month were strong, bringing us back in line with commitments compared to this time last year. That leaves us with 329.5 million lbs. uncommitted, compared to 297.6 million lbs. at the end of May last year. With current inventory at 612.4 million lbs., we are still set to have a carryout around 320-340 million lbs.

The surge in prices since the May 1st Subjective Estimate has continued, fueled by drought concerns and continued strong demand. Today’s report will keep prices firm and June seems to be shaping up to be another month of strong shipments, so I don’t expect much change there. But of course the bigger news will come when the Objective Estimate is released on June 30th. As always, that number has the potential to completely change the game. The 1.95 billion lb. estimate we are working with now would give us an almost identical supply situation to this year and allow no room for growth. Between this and the drought, very little new crop has been sold. Sellers have not been motivated by prices that are at a discount to current crop.

If the Objective Estimate comes out much higher, will we see sellers rush to increase their sold position and push prices down, or will that be moderated by continued drought concerns and disbelief that we will have enough water to fill out the crop to its finish? Or on the other hand, if the Objective Estimate comes out much lower, how much higher can prices go? Have we already lost the more price sensitive buyers and now the ones that are left are those that don’t look at the price tag when they shop? Time to place your bets before the big reveal….

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