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marketeye
Veteran Advisor

Floor Talk December 10 (Report Day)

VIDEO

 

 

USDA/WASDE REPORT SAYS:

 

U.S. 2014/15 soybean ending stocks= 410 million acres compared to the average trade analysts estimate of 427 million bushels and the USDA’s November estimate of 450 million.

 

U.S. corn 2014/15 ending stocks= 1.998 billion bushels, compared to the average analyst estimate of 2.027 billion bushels and the USDA’s November estimate of 2.008 billion.

 

U.S. 2014/15 wheat ending stocks= 654 million bushels, vs. the average analysts estimate of 654 million bushels and the USDA’s previous estimate of 644 million bushels.

 

Notes:

Corn exports were unchanged. Soybean xports up up 40 million bushels. Domestic corn food, industrial usage was raised.

 

TRADE REACTION:

--Mike North, President of Commodity Risk Management Group, says that most December reports provide very little for the market to talk about.  "This report was no exception.  All of the numbers released fell inside of the average guesses and provided little cause for markets to move.  However, we have recently experienced a 60 cent run in soybeans which has allowed traders to take money off of the table given the lack of surprises in the report.  Further, soybeans were given a report out of South America suggesting a record large crop coming from Brazil at 95.8 MMT.  We now turn to the much more anticipated January report for a clearer picture of current usage and final estimates on yield and acreage."

 

--Sal Gilbertie, Teucrium Trading, says that soybean exports from the U.S. were increased due primarily to increased Chinese demand, which lowered U.S. soybean ending stocks by nine percent. Even with the drop in ending stocks the projected global soybean balance sheet remains comfortable for now, but the buying pace of the Chinese in the beginning of 2015 will almost certainly determine the future status of the entire soy complex moving forward.
There were no major changes to corn or wheat.
The most significant part of this report is the continued projected record levels of global consumption of all three major US grains, which puts added pressure on farmers to achieve huge yields again in the next crop year. Continuing record global demand will necessitate record or near record global supplies of all grain categories in the future. Traders will likely use price dips to take year-end profits, and investment professionals and asset allocators will likely continue raising their investments into the grain markets in their asset allocation models for the coming year.
 
Sal Gilbertie | Teucrium Trading |

 

--Matt Connelly, Futures International, LLC, floor trader, says it's really a nothing report. "Corn end stox 1998 down 10 from nov but below avg guess.  Corn yield 173.4 and acreage 83.1.   Corn should find resistance up around 400-406 and farmer should sales should pick up after jan1    Bean end stox b410 below avg guess of 427, somewhat friendly, but beans are up 5% in last 5 trading days.  Wheat no surprises    Buy rumor sell fact as mkts are starting to give up as I am writing this."

 

--Dustin Johnson, EHedger LLC, grain analyst, says that the USDA raised US bean exports 40 million bushels and left production unchanged.  "It appears the market was prepared for this drop in carryout and sold into the initial strength.
Same for corn, they left production unchanged and raised food, seed, & industrial 10 million and exports 10 million.  This report doesn't change much but it may be one hurdle farmers were waiting to get past before hedging more grain before the end of the year."

 

--Jason Ward, Director of Grains and Energy, Northstar Commodity, says that he noticed that the US Corn Ending Stocks declined by 10 million bushels, not increased by 15 million bushels. "The Food/Seed/Industrial category was increased by 10 million bushels. US Ending Stocks of corn are now 1.998 billion bushels.
US Soybean Ending Stocks declined by 40 million bushels, more than the 25 million bushels expected, US Ending Stocks of soybeans are now 410 million bushels. The export category took the entire increase, up 40 million bushels in this category.
US Wheat Ending Stocks increased by 10 million bushels, right in line with the trade expectation, so ending stocks are now 654 million bushels."
 World Carryout Numbers were as follows:

Corn increased by 0.8 MMT with the increase being the Chinese crop
Soybeans declined by 0.3 MMT, a very small change, but it was a small decline
Wheat increased by 2 MMT, so not only the US number increased, the world numbers increased, viewed as slightly negative."

 

--Jack Scoville, PRICE Futures Group vice-president, says that the report data for beans and corn are actually kind of bullish, but the market not reacting that way so far.  "Wheat is neutral.  USDA threw all the additional demand in beans into exports and rightfully so, but it looks like they kind of covered it all.  Corn was all feed seed and residual, and neutral on the face of it.  Beans were bullish, we got 40 less ending stocks against expectations of max 25.  Yet we are down 15 cents.  For me, the reaction so far is more interesting than the report itself, a month or two ago beans would have been 25 or more higher on this type of change, but now the market acts like it knows all the bullish news and these numbers are alredy part of the market, which in truth maybe they are."

 

Mike

----------

At 9:30am:

Forgot to post this:

On Wednesday, private exporters reported to the U.S. Department of Agriculture export sales of 188,976 metric tons of corn for delivery to unknown destinations during the 2014/2015 marketing year. 

 

The marketing year for corn began Sept. 1.

 

 

Mike

-----------

At the open:

 

The March corn futures are trading 3 cents lower at $3.92 per bushel.
January soybean futures are trading 1 1/2 cents lower at $10.47.

 

 

 

March wheat futures are trading 7 1/4 cents lower to $5.78. The January soybean meal futures are trading $0.70 per short ton higher at $376.00. January soyoil futures are trading $0.09 higher at $32.08.

 

 

 

In the outside markets, the crude oil market is lower by $0.89, the U.S. Dollar is lower and the Dow Jones Industrials are 98 cents lower.

 

 

 

Mike

-----------

At 7:20am:

Brazil's Conab agency significantly increased its 2014/15 Brazilian soybean production estimate from 90.5 million metric tons to a record 95.8 mmt. The agency raised exports from 45.6 mmt to a record 49.6 mmt for this marketing year. Corn output jumped from 78.1 to 78.7 MMT this month.

 

Pressure for today's bean market?

 

Mike

-----------

At 5:30am:

Early calls: Corn is 1-2 cents higher, soybeans 5-7 cents higher and wheat 5-7 cents lower. The December USDA/WASDE Supply/Demand Reports will be released at 11:00am CT.

 

Trackers:
Overnight grain, soybean markets = Trading mostly higher.
Crude Oil = $0.94 lower per barrel.
Dollar = Lower
Wall Street = Lower with Fed monthly budget statement ahead.

World Markets = Europe stocks were higher, Asia/Pacific stocks were mostly lower.

 

 

More in a minute,

 

Mike

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13 Replies
marketeye
Veteran Advisor

Re: Floor Talk December 10 (Report Day)

Ahead of today's WASDE Report, at least one analyst has crawled out of bed and shared his pre-report thoughts:

 

"I agree strong exports in soybeans could imply  slightly lower ending stocks.  I wonder if the soybean carryout/carry number for last year's crop was too high? This might (in part) explain the shortfall of soybeans/soybean meal  in the pipeline, he says."

 

What do you think the USDA/WASDE numbers will tell us?

 

Mike

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roarintiger1
Honored Advisor

Re: Floor Talk December 10 (Report Day)

Mike,  I think the report will tell us that we had an abundent harvest and that with lower grain prices, demand has been exceptional.

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marketeye
Veteran Advisor

Re: Floor Talk December 10 (Report Day)

Are there any numbers that you will be watching, specifically?

 

Mike

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roarintiger1
Honored Advisor

Re: Floor Talk December 10 (Report Day)

Soybean and corn carryover numbers seem to be the most important.  Raising or lowering these numbers usually have the most impact for the traders.   Maybe there are other numbers just as important. But which ever way USDA goes with these carryover numbers will start a trend that usually continues in future predictions

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aaron-neill
Veteran Contributor

Re: Floor Talk December 10 (Report Day)

Trends, RE already started to lower yield slightly.  Will harvested acres decline, or ending stocks....  They likely will tell what will happen in Jan.

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AgsPlayers
Contributor

Re: Floor Talk December 10 (Report Day)

Soybeans bulls expect carryout to be low due to good demand. December reports don't bring big surprises usually.

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tree fmr
Advisor

Re: Floor Talk December 10 (Report Day)

"Pressure for todays market?" Markets are higher?
I am gonna support the markets and but my bartenders a drink.

Mike, this stuff is confusing!!

BTW, thank you for all you do. From Japan!
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giolucas
Veteran Advisor

Re: Floor Talk December 10 (Report Day)

Soybeans: Trend says higher and so do I.  

 

10:53 a.m.    C'mon snake eyes.

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roarintiger1
Honored Advisor

Re: Floor Talk December 10 (Report Day)

40 million bushels of soybeans have vanished.......compared to USDA's November number.      

 

and.......corn carryout is now below 2 billion.           For the end users, this has been a black Friday sale for several months now.  

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