USDA Supply and Demand Report - Market thoughts 12-11-2012
The USDA report was out this a.m. and it showed the
following
|
US 2012/13 Ending Stock Estimates
|
|||||
|
|
USDA
Dec '12 |
Avg. Trade
Guess |
Avg. Trade
Range |
USDA
2011 |
USDA
Nov '12 |
|
Corn
|
.647
|
0.663
|
0.493 - 0.752
|
0.988
|
0.647
|
|
Soybeans
|
.130
|
0.130
|
0.063 - 0.145
|
0.169
|
0.140
|
|
Wheat
|
.754
|
0.712
|
0.612 - 0.754
|
0.743
|
0.704
|
|
Global Ending Stock Estimates
|
||||
|
|
USDA
Dec '12 |
Avg. Trade
Guess |
Avg. Trade
Range |
USDA
Nov '12 |
|
Corn
|
118
|
118.006
|
115.700 - 125.100
|
117.990
|
|
Soybeans
|
59
|
59.409
|
56.700 - 60.700
|
60.020
|
|
Wheat
|
177
|
173.435
|
170.000 - 175.680
|
174.180
|
A mixed report; neutral to friendly corn and beans and
negative/bearish for wheat.
For corn the market was looking for an increase in US stocks
but they came in un-changed; perhaps adding more volatility to the January
report? For soybeans the market was
looking for a decrease in ending stocks but only got exactly what they were
looking for as the USDA increased crush; some feel there is room to increase
more in the export category; but that wasn’t done. For wheat the USDA decreased our exports by 50
million bushels; mainly in HRW; so that estimate was much higher than expected
by many.
For the world balance sheets the big negative was also in
wheat with an increase of 3-4 mmt from estimates and last month; otherwise corn
and bean numbers came in line with estimates.
There were some small adjustments that some didn’t care for; such as an
increase in the Australia wheat size and not much for decreases in the SA crops
despite the slow planting pace.
As for price action the corn and bean numbers help those
markets trade positive right after the report but they have since fallen under the
pressure that wheat has spilled over to them.
At 8:00 we have corn off 4 cents, beans off 5, KC wheat down 13, CBOT
wheat off 16, and MPLS off 8 cents.
Outside markets are supportive to grains with the US Dollar
weaker, equity futures firmer, and crude up slightly.
I think we are probably already done trading this
report. The biggest negative I see out
of the report is it has took some of the wheat contracts below the range that
we have held for months. I think our
biggest risk is more technical selling.
Keep in mind that the dry HRW talk isn’t getting us demand nor does the
price we have today have much correlation to where prices could be in several
months depending on what happens to supply, demand, and money flow. Money flow is still very nervous with the
increase capital gains taxes, fiscal cliff, and Europe situation. Today’s report should remind us that we don’t
have much for demand yet and odd’s of increase supply down; but that really won’t
be known for several months.
Please give us a call if there is anything we can do for
you.
Thanks
A couple of
announcements don’t forget we will have our weekly MWC Marketing Hour Round
Table meeting in Onida on Wednesday’s at 3:30.
Grain Marketing
Seminar 2012
We would like to
invite you to our
free grain
marketing seminars:
Dec. 19th,
2012 – 1:00 pm MST at the
Ambulance Building
in Philip, Tregg Cronin Speaker
Dec. 20, 2012 –
10:00 am CST at the Ramkota in
Pierre, Kevin Van
Trump and Tregg Cronin will be speaking on the grain markets. Lunch will
be served
Please RSVP for
either location by calling
800-658-3670 or
605-258-2686