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USDA stocks data seen bullish for corn, wheat negative for beans

Agriculture.com Staff 01/11/2006 @ 6:50am

The wheat and corn markets could get a boost while soybean prices could see pressure from the most important USDA stocks report of the year, which will be released on Thursday, one analyst told Agriculture Online.

The report reflects the U.S. stocks on hand as of Dec. 1, 2005.

Bill Gary, Commodity Information Services, Oklahoma City, Oklahoma, said the report for Hard Red Winter (HRW) wheat will be particularly bullish.

This report will add to the bullishness of an already tight HRW wheat stocks situation and the current dry crop in the Southern Plains and even in western Nebraska, Gary said.

"I've never seen the wheat look so bad out here," Gary said. "Usually you don't see ground as you look over a section of land, and right now you see ground everywhere. Hardly any cattle are being grazed."

Gary said rain is needed through January or a lot of HRW wheat acres will be abandoned for cotton in Oklahoma and Texas.

The pre-report average analysts estimate for HRW wheat stocks of 1.419 billion bushels is below 1.430 billion from a year ago. On Thursday, USDA will also release its annual estimates for winter wheat seedings.

"There won't be any big surprise in this category," Gary said. "The estimate will be higher in comparison to a year ago but with poor conditions a lot of farmers may end up plowing some of this crop under."

The average estimate for total wheat seedings is 42.4 million acres, higher than last year's estimate of 40.3 million.

For HRW wheat seedings, the average analysts estimate for Thursday's report is 30.7 million acres, slightly above a 29.9 million acre estimate from a year ago.

The USDA's corn stocks for Dec. 1 is estimated at 9.774 billion bushels compared to 9.451 billion a year ago. Because USDA is seen as being 250 million bushels low on their feed and residual usage figure this marketing year, Gary projected the government will continue to lower the corn stocks figure. "I imagine within two months USDA will have that feed & residual figure where it needs to be. So, we're not going to have that big of carryout as everybody has been envisioning." Feed and residual figures are based on crop size, according to USDA. However, in its last report, USDA increased the U.S. corn crop but not feed & residual use, Gary said.

For soybeans, pre-report average estimates of Dec. 1, 2005 ending stocks are at 2.441 billion bushels, above year ago estimates of 2.305 billion bushels. "We just have too many soybeans," Gary said. "With rain in Argentina, we have good conditions for that crop. I think this USDA report will just negative for beans."

The wheat and corn markets could get a boost while soybean prices could see pressure from the most important USDA stocks report of the year, which will be released on Thursday, one analyst told Agriculture Online.

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