Closing Comments 1-8-2013 - USDA Report Preview
Grain markets closed mixed today in trade ahead of Friday’s
Big USDA Supply and Demand report.
When things where said and done corn closed up 3 cents,
beans were off 2, KC wheat was up 1, CBOT wheat was off 1, MPLS wheat was off
1, the dollar near unchanged, and equities softer with the DOW off 55 points.
Very quiet day; one that saw grains firmer most of the
session but we tailed off towards the close.
Perhaps some index fund reallocation?
Big thing remains the report which is out on Friday.
Below is from the Van Trump Report/Farm Direction and it shows the
estimates for Friday’s USDA report which will be out at 11:00 central time January
11th.
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2012-13 Final January Production Corn & Soybeans
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||||
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|
Todays #
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Previous USDA #
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Avg Guess
|
Range of Guesses
|
|
Corn
Total Crop
|
???
|
10.725
|
10.650
|
10.325 - 10.800
|
|
Corn
Yield Avg
|
???
|
122.3
|
122.6
|
121.3 - 125.0
|
|
Harvested
Acres
|
???
|
87.721
|
86.89
|
84.56 - 87.72
|
|
Soybean
Crop
|
???
|
2.971
|
2.993
|
2.935 - 3.104
|
|
Soy Yield
Avg
|
???
|
39.3
|
39.6
|
38.9 - 41.0
|
|
Harvested
Acres
|
???
|
75.693
|
75.56
|
74.70 - 75.90
|
|
2012-13 January Ending Stocks
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||||
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|
New #
|
Previous USDA #
|
Avg Guess
|
Range of Guesses
|
|
Corn
|
???
|
0.647
|
0.647
|
0.489 - 0.760
|
|
Soybeans
|
???
|
0.130
|
0.135
|
0.114 - 0.186
|
|
Wheat
|
???
|
0.754
|
0.741
|
0.637 - 0.792
|
|
December 1st Quarterly Stocks |
||||
|
|
New #
|
Dec 1 Last Year
|
Avg Guess
|
Range of Guesses
|
|
Corn
|
???
|
9.647
|
8.219
|
8.000 - 8.750
|
|
Soybeans
|
???
|
2.370
|
1.981
|
1.800 - 2.100
|
|
Wheat
|
???
|
1.633
|
1.684
|
1.553 - 1.750
|
|
USDA Winter Wheat Acres |
||||
|
|
New #
|
Previous USDA #
|
Avg Guess
|
Range of Guesses
|
|
Total
Winter
|
???
|
41.324
|
42.585
|
41.700 - 44.650
|
|
Hard Red
|
???
|
29.863
|
30.296
|
29.900 - 31.000
|
|
Soft Red
|
???
|
8.120
|
8.898
|
8.217 - 10.000
|
|
White
|
???
|
3.350
|
3.474
|
3.300 - 3.920
|
|
South American Production Numbers |
||||
|
|
New #
|
Previous USDA #
|
Avg Guess
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Range of Guesses
|
|
Brazil
Corn
|
???
|
70.0
|
70.4
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69.0 - 72.7
|
|
Argentine
Corn
|
???
|
27.5
|
25.9
|
23.0 - 27.5
|
|
Brazil
Soy
|
???
|
81.0
|
81.9
|
78.9 - 84.0
|
|
Argentine
Soy
|
???
|
55.0
|
54.6
|
52.5 - 57.0
|
You can see that we have rather big ranges of estimates;
but you will also notice that overall
the market is looking for a somewhat neutral to bullish report for corn and
wheat and neutral to bearish report for beans.
I have a hard time trying to decide if we have more risk than
upside potential as I think we are
starting to see some positives that could allow us to partially brush off a
negative report. Such as the fund length
not being nearly as long as it was and the fact that we are getting competitive
on some of the export business. If the
funds didn’t like to help our markets over due the moves I would lean a little
towards the friendly price side; but money flow and human emotions like to
really over do things. So there is
nothing that says we can’t see more pressure from this report should it be
bearish. On the bright side of things a
bullish report should leave us plenty of upside; after all the funds are no
longer massive long.
Bottom line is for marketing purposes one wants to get them
self comfortable heading into the report.
Realizing that this could very well be the report that adds another
dollar or more weakness to our markets or if it is bullish gives us a chance to
run up; maybe even testing the higher from last summer?
For many the thing to consider might be getting squared up
in either sales or protection. Most like
the idea of using options to give one a floor should we see prices crash or
re-own with limited risk should we see prices run. So the simple choices are really buy a put
option or do a min price option.
If you want more info on either of them please give us a
call.
As for other news today we really didn’t see much. We had seen spreads firm up until the close
happened in corn. Basis feels firm for
both wheat and corn; but not really from super hot demand more from a lack of
producer selling. I much prefer to sell
a rally from demand versus supply destruction; so I also prefer to see basis
rally from demand versus producers simply not needing to sell. I have seen a few times the last couple of
years where producers not having to sell spills over to end users finding
replacement products or simply softer demand.
Tomorrow we will have our marketing meeting in Onida at 3:30
and we will at that time cover pre-report thoughts as well as potential
strategies heading into the report.
Birdseed market is very quiet; with no real buying interest
seen at all.
Please give us a call if there is anything we can do for
you.
Thanks
Jeremey Frost
Grain Merchandiser
Midwest Cooperatives
800-658-5535
800-658-3670
605-295-3100 (cell)
605-258-2166 (fax)