AM Comments 11/09/12
Friday, November 9, 2012, 8:00 amSubmitted by: Dustin Weiner
Well… the USDA numbers came out and at first glance they are bearish to soybeans and were relatively a non-event in corn. Here are the details:
CORN
· Production: 10.725 billion bushels (using 122.3bpa)
o Average Trade Guess: 10.647b, Oct USDA: 10.706b
· Carryout: 647 million bushels
o Average Trade Guess: 628m, Oct USDA: 619m
SOYBEANS
· Production: 2.971 billion bushels (using 39.3bpa)
o Average Trade Guess: 2.892b, Oct USDA: 2.860m
· Carryout: 140 million bushels
o Average Trade Guess: 131m, Oct USDA 130m
So as expected they increased soybean production, only it was a little more than expected and the bigger shocker is the carryout number. I think many traders felt that any additional supply would get soaked up by the big export demand pull and the large domestic processor crush. We probably won’t find out the actual usage until later in the year when we get into quarterly stocks numbers.
For corn, it appears to be status quo. Both demand and production stayed relatively the same. The range-bound action in corn appears to be staying that way for a while. Just like beans, the true demand sector will be better identified in the quarterly stocks reports coming later in the year.
So. After all of that we will turn our attention back to the two recent favorites for topics: outside markets and South American weather. The outside markets (once again) are a negative input. Equities are still falling while the dollar bounces – all negative signs for commodities and the economy in general. President Obama is planning a speech of some sort on the economy midday today.
With all of the negative outside inputs that don’t appear to be changing soon; if we are to see higher prices in grains it will need to be led by the cash markets (basis and spreads).
Currently
Corn is down 1 to 3 cents
Soybeans are down 15 to 20 cents
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