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USDA data seen as neutral to bearish for markets, says one analyst

Agriculture.com Staff 02/09/2006 @ 7:12am

In its monthly Supply and Demand report on Thursday, the USDA released neutral figures to the market, one analyst said.

Don Roose, U.S. Commodities, said the government did some minor tweaking of the U.S. numbers, but overall the report left a neutral tone to the markets.

"Overall it (report) says you are still supply bearish in all the grains except for Hard Red Winter (HRW) wheat," Roose said.

"This market has been trading in adding risk premium into the market from outside factors such as fund investing ," he said. " I imagine that will be the direction we continue to take."

For corn, USDA left its 2005-2006 U.S. corn exports figure unchanged at 1.85 billion bushels. U.S. ending stocks for 2005-2006 went down 25 million to 2.4 billion bushel as a result of increased ethanol production.

After cutting soybean exports 40 million bushels, and lowering soybean crush figures by 10 million, USDA raised its 2005-20006 carryout estimate 50 million bushels to 555 million bushels.

"That is a massive number that puts some pressure on the market," Roose said. "The trade anticipated this number, but it's still high."

Roose suggested the soybean market's attention will turn now to the South American crop weather for any bullish support.

For wheat, USDA left its 2005-20006 carryover unchanged at 502 million bushels. "Bottom line is the Soft Red Winter wheat is in abundant supply like corn ," Roose said. " All eyes are on the HRW wheat crop in the U.S. southwest."

To follow the soybean crop situation in South America visit South America Crop Watch at Agriculture.com.

In its monthly Supply and Demand report on Thursday, the USDA released neutral figures to the market, one analyst said.

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