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USDA data seen as friendly for grain markets

Agriculture.com Staff 03/11/2009 @ 6:40am

CHICAGO, Illinois (Agriculture Online)--The USDA released friendly numbers Wednesday for the grain markets, in its March Supply/Demand Report.

CBOT traders are calling the wheat market to open 4-6 cents higher, soybeans 2-3 cents higher, and corn 3-5 cents higher.

Matt Pierce, Futures International LLC, says the report is overall supportive with lower ending stocks for both corn and beans helping support yesterday's rally.

"A shocker for corn with ending stocks actually lower, ethanol and feed use higher. Bean ending stocks are too low for anything but a significant rally with no negative momentum from world stocks levels. Wheat is the only bear number with usage down and ending stocks higher. World ending stocks are painful as well gaining 6.0 MMT now at 155.8 MMT.

Jason Ward, Northstar Commodity Investment Co., agrees the report is supportive for today's grain markets.

"U.S. corn exports were dropped 50 million bushels, and how they (USDA) did it surprised me. They lowered exports by 50 million bushels, something that needs to be watched closely. Our US Dollar has been trending higher and this would slow exports, but we have not closed above the key resistance which is 89% on the Dollar. If the economy recovers or even stabilizes, the flight to safety investment that the dollar enjoys will certainly slow, thus lowering the US Dollar and this export target by USDA is too low. We need to sell 21 million bushels/week to reach USDA's new target," Ward says.

"U.S. soybean carryout was dropped 25 million bushels and is on the lowest end of the range of expectations. The carryout of 185 million bushels is the tightest carryout in 5 years. U.S. soybean exports increased 35 million bushels to a record 1.185 billion bushels. Soybean crush was lowered by 10 million bushels as expected," Ward says.

USDA estimated U.S. 2008-09 soybeans carryout at 185 million bushels, vs. its February estimate of 210 million bushels, and the average analyst estimate at 200 million bushels.

For corn, USDA estimated U.S. 2008-09 carryout at 1.74 billion bushels within its February estimate of 1.790 billion bushels and slightly below the average analyst estimate of 1.811 billion.

For wheat, USDA pegged U.S. 2008-09 carryout at 712 million bushels compared to 655 million bushels and to the average analyst estimate of 659 million bushels.

"Global numbers looked bearish to corn and wheat, while neutral to soybeans," Ward says.

For world numbers, USDA estimated 2008-09 soybean carryover at 49.95 million bushels compared to its February estimate at 49.87 million bushels. Other numbers of interest include the USDA's 2008-09 Brazil soybean production estimate at 57.0 million metric tons equal to its February estimate of 57.0 million metric tons. The Argentina soybean 2008-09 production estimate is pegged at 43.0, compared to the USDA February estimate of 43.8 million metric tons.

CHICAGO, Illinois (Agriculture Online)--The USDA released friendly numbers Wednesday for the grain markets, in its March Supply/Demand Report.

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