Grain markets closed mixed to weaker ahead of the USDA
report that will be out in the a.m.
Corn was off 7 cents, beans closed up 2-3, KC wheat was down
7, MPLS wheat was off 7, CBOT wheat was down 12, equities seen the DOW close up
15 points, the dollar is near unchanged, and crude is down about a quarter.
Not a big news day today; more of just a risk off day with
all of the unknowns such as the USDA report that is out in the a.m., the fiscal
cliff, ideal weather, and other tax concerns as we go into the new year.
One positive that we had today was the reversal that
soybeans did; after trading down nearly 20 cents they managed to turn around
and close up a couple; which I viewed as a good technical sign.
We did get a little wheat business today doing a little more
SRW and white wheat with Egypt; but there was also some Saudi Arabia business
done that have very little US wheat; more EU and Australia wheat.
This morning we had export shipments out and they continued
the trend as of late. Good bean
shipments of 46.6 million bushels which is well above the 18.3 we need on a per
week basis to meet current USDA estimates.
Wheat came in at 13.9 million bushels nearly 10 million bushels light of
what we need on a per week basis to meet current USDA projections. While corn came in a 7.9 million bushels
shipped versus the nearly 25 million bushels we need per week to meet current
USDA projections.
We haven’t come close hitting what we need on a per week
basis for either corn or wheat since sometime in September. While beans have been super strong since that
same time. I guess the point isn’t bean
demand is super strong or wheat and corn demand is super weak. We do need to keep that in mind; but the
point is that keep in mind there is only so much elevations in our infrastructure.
As example I know our local elevator’s
can’t handle ton’s of corn at the same time they handle ton’s of wheat; as
there are only so many rail cars along with so many bin’s. I think more important then shipments has to
be sales as this point because we are in the time period when many exporters
are still focusing on handling the beans due to the inverse in the market. In few
months hopefully that opens the door for more wheat/corn shipments.
Below is information for the USDA report.
US 2012/13 Ending Stock Estimates
|
|||||
|
USDA
Dec '12 |
Avg. Trade
Guess |
Avg. Trade
Range |
USDA
2011 |
USDA
Nov '12 |
Corn
|
?
|
0.663
|
0.493 - 0.752
|
0.988
|
0.647
|
Soybeans
|
?
|
0.130
|
0.063 - 0.145
|
0.169
|
0.140
|
Wheat
|
?
|
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
|
?
|
118.006
|
115.700 - 125.100
|
117.990
|
Soybeans
|
?
|
59.409
|
56.700 - 60.700
|
60.020
|
Wheat
|
?
|
173.435
|
170.000 - 175.680
|
174.180
|
As you can see the market is expecting a bearish report for
both corn and wheat; while a bullish report for soybeans. Ideas are they cut the US corn export
numbers, cut the US wheat export numbers, and increase the soybean export
numbers.
Typically the December report isn’t a huge market
mover. The big report is Jan 11th;
which if memory serves me right has had one grain or another trade limit up or
limit down every year since 2008.
One somewhat silver lining is that if the reports do come in
a little bearish for both wheat and corn perhaps that adds back a little needed
demand. Longer term I think the January
report and what it does for final production and quarterly stocks to be very
important. The January report will give
us final production whereas the report in the a.m. won’t have any adjustments
to production. The January report will
also have winter wheat acres planted.
Possible unknown cards that the USDA could throw out
tomorrow include demand estimates and world production estimates. The above shows the markets expectation but the
above doesn’t say exactly what the market is already trading. Sometimes for markets to really move on
report days you need to really miss the trade estimate while other times just
coming in inline with trade estimates causes sparks. To me the recent sell off the past couple
days on corn…..nearly 35 cents from the
highs on Thursday to the lows today has priced in a bearish report. So to me that says if we don’t get a bearish
report the market has a good chance of bouncing and if the report is bearish
will it already be priced in???
Basis was mixed to weaker the past couple of days. But with the weakness in the board thus lack
of producer selling basis seems to have stabilized. Also I would note that for the first time in a
long time the railroad didn’t set cars in when expected; but rather a couple
days late. If this is wide spread it
could quickly cause some pop in basis values.
But nearing the holiday’s probably doesn’t help because many industries
have plenty of down time.
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
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