Limit down.........BEARISH USDA Crop Report drives prices down hard on commodities...
Below are closing comments as well as a forward from Country Hedging
with a recap from today’s USDA report.
Markets closed down hard behind a bearish??? USDA report; corn lead the
way with old crop down the limit of 40 cents, new crop corn was down about 22
cents, beans where down 20 or so; which was a good 30 cents off of their lows,
KC wheat was down 29, MPLS was off 9, CBOT wheat was off 36, crude was down
over a dollar a barrel, equities ended higher with the DOW up 22 points, and
the US dollar was weaker down 503 on the cash index at 80.842.
Below is a recap of today’s report.
You will notice a couple things;
first the market was anticipating neutral to friendly numbers; second we
got numbers that from last month or last year where neutral for the most
part. Year over year corn is still at a
decrease in ending stocks; and even from last month we are at a decrease.
So why limit down? Because the market
was expecting a cut of 100 million bushels and that didn’t happen. Now there seem to be a lot of holes in the
USDA’s numbers; but they are the numbers and they are what the trade will watch
and follow as we go forward.
My personal view is that this report is exactly what we need if we want
to have a chance to have rallies as we go forward. So I will point out a couple of the bright
spots from today’s price action and report.
First off demand didn’t get hurt at all by today’s report or price
action; as a matter of a fact I have had more feed buyers of corn call to price
corn today then I did in a long time.
Secondly the wheat acres up versus last year and versus trade estimates
give us a chance to have an acre war as that 1 million acre increase means 1
million less acres available for row crops.
3rd the Brazil corn crop was left unchanged; perhaps leaving
the door up to future cuts and that could lead to some demand for the US at
some point. I don’t want to sound
bullish as today’s report was anything but; but I do see at least a little hope
that we might be able to bounce out of this.
Now weather we do or don’t probably depends on the direction of the US
Dollar, the South American weather, and then in the coming months our
weather.
Please give us a call if there is anything we can do for you.
Thanks
