09-12-2012 06:49 AM - edited 09-12-2012 02:19 PM
At the close:
The Dec. futures corn contract settled 7 3/4 cents lower at $7.70. Nov. soybean futures contract closed 44 1/2 cents higher at $17.46. Dec. wheat futures settled 7 1/4 cents higher at $8.91 per bushel. The Dec. soyoil futures contract closed $0.58 higher at $56.46. The Dec. soymeal futures contract finished $17.60 per short ton higher at $533.50.
In the outside markets, the NYMEX crude oil is $0.18 per barrel lower, the dollar is lower and the Dow Jones Industrials are 97 points higher.
The Dec. futures corn contract is trading 7 cents lower at $7.70 1/2. Nov. soybean futures contract is trading 46 cents higher at $17.47. Dec. wheat futures are trading 7 cents higher at $8.90 3/4 per bushel. The Dec. soyoil futures contract is trading $0.75 higher at $56.63. The Dec. soymeal futures contract is trading $16.40 per short ton higher at $532.30.
In the outside markets, the NYMEX crude oil is $0.07 per barrel higher, the dollar is lower and the Dow Jones Industrials are 32 points higher.
Alan Brugler, Brugler Marketing & Management LLC president, says the soybean market is running higher because many believe export sales can't go as low as USDA has projected without higher prices.
"The global ending stocks forecast was more bearish than anticipated, but USDA didn't cut projected Chinese imports and they are the dominant buyers," Brugler says.
Corn has been acting bearish, ignoring the lower USDA corn yield numbers, he says. "Today, USDA confirmed that the peripheral states have much better yields than the core Corn Belt states, and that takes away some of the most bullish production scenarios. Price rationing still has to take place," Brugler says.
Beans are now up 40 cents! Corn is still languishing, hitting a 2-month low.
Note: As a result of today's USDA estimates for corn usage, ethanol use will account for 26% of the total supply, while feed use accounts for 46%. Projected exports were lowered slightly from last month to 1.25 bbu.
At the open:
The Dec. futures corn contract is trading 7 cents lower at $7.70 1/2. Nov. soybean futures contract is trading 25 3/4 cents higher at $17.27. Dec. wheat futures are trading unchanged at $8.83 per bushel. The Dec. soyoil futures contract is trading $0.67 higher at $56.55. The Dec. soymeal futures contract is trading $6.90 per short ton lower at $522.80.
In the outside markets, the NYMEX crude oil is $0.06 per barrel higher, the dollar is lower and the Dow Jones Industrials are 17 points higher.
Beans are trading 27 cents higher, con is down 8 cents, as they react to the USDA data Wednesday. Here's the report response from Terry Roggensack, The Hightower Report co-founder:
"The USDA Crop Production and Supply/Demand reports for September were considered supportive but negative corn numbers might limit the advance. The USDA pegged US soybean production at 2.634 billion bushels as compared with trade expectations at 2.657 billion bushels. This was 23 million bushels below trade expectations and down 58 million bushels from last months estimate. The USDA had little room last month to reduced usage and reducing usage by another 72 million bushels this month should help provide support. Ending stocks were left unchanged at 115 million bushels. The USDA had to account for beginning stocks down 15 million bushels from last month. World ending stocks were revised just slightly lower as Brazil and Argentina estimates were left unchanged.
PRICE OUTLOOK: The USDA was forced to drive usage down by another 72 million bushels for the report as production came in below expectations and beginning stocks were revised lower. Exports were revised 55 million bushels lower from last month even though export sales so far have reached 60% of last months projection as compared with 35% sold as "average" for this time of the year. In other words, the USDA had the ammunition to revise exports sharply higher but could not. Crush was also revised lower to 1.5 billion bushels, down 15 million but many commercials can not see crush below 1.55 billion from 1.705 billion for the season which just ended. The task of rationing demand will be very difficult and prices will need to push high enough to dramatically slow exports. January soybeans look poised for run to at least 1815. Keep 1855 and 1979 as longer-term objectives.
The USDA report this morning was considered bearish for corn. The USDA pegged the average US corn yield at 122.8 bushels/acre compared with 123.4 bushels per acre last month. The trade expected a yield near 120 bushels/acre. The USDA pegged 2012/13 corn production at 10.727 billion bushels vs. 10.779 last month and this was against traded estimates of 10.380 billion bushels. Harvested acres were also revised lower to 87.361 million acres vs. 87.4 million acres in August. Trade expectations were at 86.17 million acres. Ethanol for fuel was left unchanged at 4.5 billion bushels and exports declined by 50 million bushels to 1.250 billion. Exports have fallen off the pace to meet the USDA forecast due to cheaper available supplies in South America. World ending stocks for the 2012/13 season came in at 123.95 million tonnes as compared with trade expectations near 121 million and 123.3 million tonnes in last month’s estimate.
PRICE OUTLOOK: December corn fell sharply lower following the report and the market is already down near 90 cents off of the August 10th highs. The next key support level does not emerge until 747 3/4.
The USDA reports this morning were considered neutral for the wheat market but bearish news for corn pulled the market lower. The US supply/demand numbers were left unchanged against last month. World ending stocks for the 2012/13 season came in at 176.7 million tonnes as compared with 177.17 million last month and 198.6 million last year. This was more than 2 million tonnes above trade expectations near 174.5 million tonnes. The 2012/13 Russian wheat production was cut by 4 million tonnes to 39 million. Australian production was left unchanged at 26 million tonnes. All world wheat production was pegged at 658.7 million tonnes, down about 4 million tonnes.
PRICE OUTLOOK: Today’s report was considered slightly negative but the corn news and a lack of Australia production revision has the market under significant pressure. December wheat looks set for further long liquidation selling pressure with 837 as first key support level."
One analyst says, "Bearish corn and neutral beans. Bigger than expected corn production is the big news here, and we have been hearing that the yields are not as bad as they could have been. Ending stocks corn old crop up at least as much as expected as demand has in fact tailed off. Overall, the picture presented by USDA is somewhat less dire than what the private guys have been saying. Beans neutral and tight, and given the selling the market is rebounding. Chart patterns could become very negative for corn after today on a medium to longer term," he says.
One analyst says, "This report shows the resilience of corn demand even in the face of increased global prices. Corn supplies are adequate but remain historically tight. The fact that projected demand has actually increased slightly from last month means the market has adjusted to the higher price regime. Any price dip in corn as a reult of this report will likely be met with healthy end-user buying, since demand is not falling even with higher market prices. Soybeans are still the real story of these reports, the balance sheet for soybeans is very tight. There is some demand destruction projected but ending stocks of old crop were reduced indicating shrinking supplies even as projected demand is reduced slightly. Global wheat supplies remain adequate.."
Yet another analyst says, "Corn is bearish, should put the top in. beans still look bullish, lower yield followed by more usage cuts to keep carryout in line, but that usage figure is TOO LOW.
Wheat was in line with expectations. Look for funds to further reduce exposure to long corn.
They may switch to longer beans. Seems like a better investment to be long beans vs. corn. Still have tremendous usage while corn usage is SLOWING."
Corn=122.8 bu./acre vs. 123.4 a month ago
Soybean=35.3 bu./acre vs. 36.1 a month ago.
U.S. Corn Production=10.72 billion bushels vs. 10.779 bill. a month ago.
U.S. Soybean Production=2.634 billion bushels vs. 2.692 bill. a month ago.
What do you all think? The Report appears negative for corn?
Early calls: Subject to this morning's 7:30am CT USDA Crop Production Report. Corn is 2 cents lower, soybeans are trading 8 cents higher, wheat closed lower.
Overnight grain, soybean markets=Trading mostly lower.
Crude Oil=$0.63 per barrel higher.
Wall Street=Seen opening higher, as a German court rules the European Stability Mechanism.
More in a minute,
09-12-2012 07:12 AM
Got to chat a little with Don Roose, broker and analyst here with U.S. Commodities yesterday, and he said the big number to watch this morning will be harvested acres for corn. Everybody think that's right? Here's a little more from my chat with Don.