Friday, December 9, 2011

USDA Crop Report Dec 9th

Markets are called weaker this a.m. behind an overall bearish USDA report.  One that was very negative our world fundamentals.

In the overnight session we seen grains mixed with corn up a penny or two and wheat off a couple pennies.  Calls this a.m. range from 5-30 lower on most of the grains.

Here is a recap of the report.
US Carryover

Friday       Nov
            2011-12      2011-12
            estimate     estimate

Corn         0.848     0.843
Wheat        0.878     0.828
Soybeans     0.230     0.195
Soyoil       2.280     2.080
Soymeal    300,000   300,000
Rice          37.5      37.5
Cotton        3.50      3.80

USDA World Carryover

            Friday       Nov
            2011-12      2011-12
            estimate     estimate

Wheat         208.5       202.6
Corn          127.2       121.6
Rice          99.51      100.57
Soybeans       64.5        63.6
Soymeal        8.28        8.75
Soyoil         2.64        2.41
Cotton         57.7        55.0

USDA World Grain Production

                    Friday       Nov
                    2011-12      2011-12
                    estimate     estimate
China corn            191.8      184.5
South Africa corn      12.5       12.5
Argentina corn         29.0       29.0
Australia wheat        28.3       26.0
Argentina wheat        14.5       13.0
EU 27 wheat           137.5      137.5
Canada wheat           25.3       24.2
China wheat           117.9      117.0
Russia wheat           56.0       56.0
Ukraine wheat          22.0       22.0
Brazil soybeans        75.0       75.0
Argentina soybeans     52.0       52.0
China soybeans         13.5       14.0

The biggest negative is probably the wheat carryout for the US going up 50 million bushels as exports where decreased by 50 million bushels.  Versus estimates by the industry ahead of the report we seen corn at 848 million bushel carryout versus a 830 ish average trade estimate, beans at 230 verus about 215 avg guess, and wheat at 878 versus about 830 on average. 

The positive I see on the report despite all of the very weak opening calls is the fact that many of these numbers where expected.  China raised it’s corn estimate earlier this week, Stats Canada had raised their estimate, and even the Australian wheat crop was pegged bigger this week.  So personally I am not going to jump all over the very weak opening calls that some have indicated; I think the news could quickly become old or in a sense was already old going into the report.

Outside markets are firmer at 9:20 and they could add a little support.

The one thing that this report should continue to tell us is the fact that our S & D is overall bearish for the grains, it is increasing year over year and has really increased versus the tightest we have seen earlier in the past year or so.

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