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No shutdown for corn, soybeans

Updated: 10/04/2013 @ 1:42pm

The market is coping well with a lack of some regular data from the government. Everything weather-oriented is working just fine, but other information, such as the weekly export sales report, is missing.  A quick resolution may give us Monday’s crop progress report. Longer term, and more importantly, traders continue to ponder the likelihood of the October crop reports’ release. These reports are due out next Friday, the 11th.

Nonetheless, private analysts continue to release crop size estimates.  So far, it seems likely the corn yield will increase from September’s estimate of 155.3 bushels/acre. This, on top of the large stocks revealed in Monday’s Grain Stocks report, casts a bearish pall across the market.  

Although it is aggravating when the USDA comes up with an unexpected number, it is what it is. To make this work, the USDA will need to lower 20120-13 feed/residual use in the next report. It is also likely that 2013-14 feed use will need to come down as a result.  

For soybeans, there is a different sort of story. The USDA increased last year’s crop size by 19 million bushels (a combination of more acres and a .2 bushel increase in yield). These bushels basically went straight to the carryout, which was larger than anticipated.  Any adjustments to use should be minor.  

By now, market participants have gotten the impression that early yields are large and larger than anticipated. Even early bean yields have impressed. The market will continue to question the overall bean yield, as these early yield results are from early planted fields. There are still many questions about late-planted fields (which is a lot of fields!) and how well yields will hold up.    

The risk of loss in trading commodities can be substantial.  You should therefore carefully consider whether such trading is suitable for you in light of your financial situation. 

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