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USDA corn data seen negative for corn, bullish for soy, wheat markets

Agriculture.com Staff 02/12/2016 @ 3:46am

USDA released bearish corn, bullish soybean, wheat data on Wednesday, according to analysts.

Don Roose, U.S. Commodities says the corn crop size was shockingly higher than trade expectations.

"There's no doubt the corn market will trade much lower, because of the high yield estimate," Roose said.

In its September world crop production and U.S. supply/demand reports, USDA pegged the corn yield at 155.8 bushels per acre. If realized, the U.S. 2007 corn production would be an all-time high of 13.3 billion bushels.

Al Kluis, Kluis Commodities, says the USDA's corn yield estimate becomes the largest month-to-month increase ever. "They raised the corn crop essentially that's 300 million bushel increase from August."

Because USDA increased corn usage by 170 million bushels, the negativity to the market may be tempered, Kluis says. "The corn numbers will drive prices lower for the next few days until we start to focus on the demand side of the picture."

For soybeans, bullish numbers were released. USDA set the U.S. 2007-08 carryout at 215 million bushels, below the August estimate of 217 million. The U.S. crop size was estimated at 2.61 billion bushels, below 2.65 in August.

"We still have to see what the yields are going to be, but this report is bullish for soybeans," Roose said.

For wheat, USDA dropped the 2007-2008 U.S. wheat carryout by 11.0 million bushels to 362 million.

"That still tightens supply, but it wasn't a large drop," Kluis said.

The highlights on world numbers are the 2007-08 corn carryout, raised about 3.2 million metric tons, lowered 1.2 million metric tons for soybeans and lowered 2.4 million for wheat.

Meanwhile, John Roach, Roach Ag Marketing Ltd says the USDA report doesn't change the way producers should be thinking about market decisions.

"We still don’t want to sell the corn or beans that you can store for a reasonable cost. We expect higher corn and bean prices after harvest," Roach wrote in a daily newsletter.

"My plan is to make some bean sales during South American summer weather worries and U.S. acreage 'tug-of-war' in December and January," Roach stated.

On Wednesday, USDA said South America would raise 101 million tons of beans, while the beginning U.S. harvest is expected to total 71.27 million tons. With South American farmers raising 40% more beans than U.S. farmers, their summer weather will be watched very closely by traders, Roach said.

USDA released bearish corn, bullish soybean, wheat data on Wednesday, according to analysts.

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