Friday, January 10, 2014

FC Morning Grain Market Commentary for 1-10-2014

Morning Comments 1/10/2014

Friday, January 10, 2014, 8:35 am
Submitted by: Kyle Lehman


Quiet overnight trade ahead of the USDA supply/demand report along with stocks estimates for December 1st set to be released at 11 am. Commodities have made new contract lows the past couple trading sessions with the expectations today’s report will show a record crop in South America. The current average trade guess have corn production just over 14 billion bushels with ending stocks around 2 billion. There are really 4 things to focus on in today’s report: First, how much will crop size increase? The trade is expecting yield to increase to 161.3 bpa. Second, will the demand number change and to where? Soybean export sales are just under 1.5 bln bushels which is already above the USDA estimate so the obvious answer is soybean demand should increase. Third, what were corn stocks on December 1st? This number gives a good idea of how corn is being used in feed demand. Current estimate is for stocks to be 10.79 bln bushels for corn and 2.161 bln for bean. And lastly, how much of this bearishness is already priced into the market? Since the last USDA report corn has been stuck in a range from $4.20-4.40 but this week we made new lows and are currently sitting at $4.10.
 

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