Opening Comments 5-10-2013 USDA Report Day - Limit move coming up?

Markets are called choppy to start this a.m. but it is a wait and see day.  Hurry up and wait for the USDA report that will be out at 11:00 central time.

Corn was down 3-4 cents, KC wheat was off 4-8 cents, MPLS wheat was off 4, CBOT wheat was off 4-7 cents, old crop beans up a couple, and new crop beans down a couple.  Outside markets are pointing to a slightly firmer opening in the DOW, the US dollar continues its strength up a couple hundred points, crude is down a couple bucks, and gold is getting hit hard down 38 bucks an ounce.

With gold and crude price action it really looks like a risk off day for the commodities; but for the grains it will all be about the report out at 11.  The report should help set the stages to how important weather is; it will tell us if we need to curb more old crop demand or find more new crop demand.  The big question or concerns we really need to watch for continue to be the world crop sizes and the new crop balance sheets.

USDA estimate are below.

The below is coming from the Van Trump Report.

US Ending Stocks 2012/13  May # April USDA # Avg Guess Range of Guesses Corn ??? 0.757 0.749 0.684 - 0.800 Soybeans ??? 0.125 0.123 0.107 - 0.130 Wheat ??? 0.731 0.733 0.720 - 0.747 US Ending Stocks 2013/14 May # Feb Ag Outlook Avg Guess Range of Guesses Corn ??? 2.177  1.993 1.387 - 2.427 Soybeans ??? 0.250 0.236 0.147 - 0.325 Wheat ??? 0.639 0.658 0.486 - 0.800 Global Ending Stocks 2012/13 May # April USDA # Avg Guess Range of Guesses Corn ??? 125.290 125.646 123.500 - 132.100 Soybeans ??? 62.630 62.300 61.111 - 63.000 Wheat ??? 182.260 181.528 178.300 - 183.200 Global Ending Stocks 2013/14 May # Avg Guess Range of Guesses Corn ??? 151.695 130.000 - 168.300 Soybeans ??? 68.991 64.000 - 83.000 Wheat ??? 184.368 175.000 - 195.800 US Wheat Production May # 2012 Totals Avg Guess Range of Guesses All Wheat ??? 2.269 2.062 1.832 - 2.190 All Winter ??? 1.646 1.497 1.359 - 1.604 Hard Red Winter ??? 1.004 0.776 0.676 - 0.875 Soft Red Winter ??? 0.420 0.504 0.473 - 0.636 White Winter ??? 0.222 0.217 0.204 - 0.226 South American Production May # April USDA # Avg Guess Range of Guesses Brazil Corn ??? 74.000 74.708 73.000 - 77.500 Brazil Soy ??? 83.500 82.807 81.500 - 83.500 Argentine Corn ??? 26.500 25.583 24.000 - 26.500 Argentine Soy ??? 51.500 50.714 48.500 - 51.500

I did actually see a little producer movement pick up late yesterday.  Which was probably just the right thing to do ahead of a USDA report as we never know what wild card they may through on the table.

I do continue to see some comments on the Australia wheat crop size; mainly comments that moisture is needed.  To get a bull market we will need some issues with some of our competitors and Australia is one of them.

South American has bought about 400k tones of corn and wheat combined this week; with most of it either out of South America or optional – origin. 

The Buenos Aires Cereals exchange left their estimate of the Argentine soybean crop unchanged at 48.5 MMT; versus the USDA at 51.5 before today’s update.  They also left their corn number unchanged at 24.8 MMT versus the USDA at 26.5 MMT.

Weather is still a mixed bag and today’s report as well as Monday’s crop progress will tell us how important it is.  Keep in mind that one day we will go from weather and moisture causing delays and acre losses to the mind set of rain makes grain.  That is part of the reason it has been hard to rally our markets behind the idea that we won’t get it planted or will be losing acres.

Watch the weather this weekend and see if any of the possible freezes develop.

Please give us a call if there is anything we can do for you.