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USDA data seen bearish for corn, weather to trump

Agriculture.com Staff 07/12/2007 @ 6:51am

The USDA released negative market data Thursday for the corn, soybeans and world wheat ending stocks, positive for U.S. new-crop wheat in its July Supply/Demand report on Thursday.

Still, the current dry weather pattern is seen trumping today's report, analysts say.

For corn, USDA estimated 2007/2008 ending stocks at 1.502 billion bushels, higher than its June estimate of 997 million, and higher than trade guesses at 1.418 billion.

Don Roose, U.S. Commodities, says the USDA estimated larger old-crop corn stocks than the trade thought at 1.137 billion bushels.

"USDA gave a cushion for yield on new-crop ending stocks. "Because of weather, I think we're still looking at a higher market," Roose says.

Roose added, "We are looking at a threatening weather forecast. This high pressure ridge tracks across the Corn Belt and sets up on the Eastern Corn Belt when its done."

For Thursday's CBOT open, soybeans are called 3-5 higher, wheat 4-6 cents higher, corn down 2-3 cents, Roose said. "I think weather trumps this report."

For soybeans, USDA estimated 2007/2008 ending stocks at 245 million bushels, lower than its June estimate of 320 million, higher than trade estimates of 221 million. For old stocks, USDA estimated soybean stocks at 600 million bushels, slightly higher than trade estimates, but lower than its June estimate of 610 million.

USDA estimated U.S. wheat production at 2.138 billion bushels, down 30.0 million from last month's estimate, and at the low end of trade estimates.

U.S. 2007/2008 ending stocks were pegged at 418 million bushels, lower than trade estimates of 464 million, and the June estimate of 443 million.

Sid Love, Kropf & Love Consulting Services LLC, said the bullishness is coming from USDA lowering the new-crop wheat stock.

"That's assuming we are going to feed about 84.0 million more acres this year," Love said. "I don't know about that. We'll feed wheat in the first quarter with the damaged wheat, but we'll have to see."

Wheat feed and residual use is lowered 15 million bushels this month based on higher expected prices.

Al Kluis, Kluis Commodities, said the USDA feed usage estimates are surprising. "When you consider we are seeing in an increase of cattle, it's hard to understand a lowering of feed usage. USDA must believe more distiller grains are being fed," Kluis said.

The USDA released negative market data Thursday for the corn, soybeans and world wheat ending stocks, positive for U.S. new-crop wheat in its July Supply/Demand report on Thursday.

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