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USDA data seen neutral to friendly

Agriculture.com Staff 06/11/2007 @ 7:18am

USDA released a neutral-to-friendly report on Monday, according to analysts. Very few changes were made to the June USDA Supply/Demand report.

USDA, in its report, cut corn exports by 50.0 million bushels, and raised 2006-20007 ending stocks by the same amount to 987.0 million bushels. For 2007-2008, USDA raised U.S. corn carryout 50.0 million to 997.0 million bushels.

USDA left its corn and soybean production estimates unchanged at 12.46 billion bushels and 2.745 billion respectively.

Don Roose, U.S. Commodities, said Monday's report will be trumped by weather on the trading floor.

"This was all anticipated," Roose said. "I think the government is saying our export pace is slowing down. They (USDA) is really not saying anything. I think we are on hold here."

Roose added, "With crop ratings at record levels, I think because USDA didn't raise yield estimates, the bulls have to be breathing a sigh of relief."

For soybeans, the USDA left the old-crop carryout at 610.0 million bushels, and new crop carryout at 320 million.

Soybean ending stocks for 2007/08 are projected at 320 million, down almost 50 percent from 2006/07. Other changes this month include reduced soybean oil used for biodiesel for 2006/07 and 2007/08 as returns to biodiesel production become less favorable due to higher vegetable oil prices.

Global vegetable oil consumption is projected to increase 4.1 percent in 2007/08 led by increases for China, India, and EU-27. Increased consumption in EU-27 mostly reflects increased production of biodiesel. Global vegetable oil stocks are projected to decline 6 percent from 2006/07.

"The market will still focus on the blocking weather ridge in the middle of the Corn Belt, keeping things dry," Roose said. "The big strength overnight, and the sharply higher calls this morning are coming from the weather."

Noel Blue, a Chicago Board of Trade floor trader and broker, said most of the data is considered already factored into pricing. "But, much needed moisture that is essential to ensure crop yields overall is just not consistent enough to allow prices to fall."

Blue added, "The uncertainty of weather is adding to bullish momentum and today's USDA figures are only adding to the sentiment."

USDA, in its report, lowered white winter wheat production from 241 million bushels to 218. All winter wheat was estimated at 1.610 billion bushels, slightly below USDA's May estimate of 1.616. Hard red winter wheat production was estimated at 1.032 billion, slightly above the previous estimate of 1.028 billion.

USDA released a neutral-to-friendly report on Monday, according to analysts. Very few changes were made to the June USDA Supply/Demand report.

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