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Traders react to bearish USDA report

12/09/2011 @ 8:04am

DES MOINES, Iowa (Agriculture.com)--The USDA/WASDE released bearish data Friday.

As a result, the Early Calls for the commodities are seen lower. For corn and wheat, the opening calls are 20-30 cents lower and 15-20 cents lower for soybeans.

In its December Supply/Demand Reports, the USDA estimates the U.S. 2011-2012 corn ending stocks at 848 million bushels, compared to the average trade analysts estimate of 838 million bushels and the government's November estimate of 843 million.

For soybeans, the 2011- 2012 ending stocks estimate is pegged at  230 million bushels, vs. the average trade estimate of 213 million and the USDA's November estimate of 195 million.

The U.S. wheat ending stocks, before the 2012 harvest, is estimated at 878 million bushels, compared to the average trade estimate of 830 million bushels and the USDA's November estimate of 828 million bushels.

World Inventories

The global 2011-12 inventory of corn is estimated at 127.2 million metric tons, vs. the average trade estimate of 122.13 mmt, and the previous USDA estimate of 121.57 mmt.

For soybeans, the USDA sees the world inventories at 64.5 mmt, vs. the average trade estimate of 64.15 mmt and the USDA's previous estimate of 63.56 mmt.

USDA estimates 2011-12 world wheat stocks at 208.5 mmt, compared to the average trade estimate of 202.89 mmt and its November estimate of 202.60 mmt. 

Trade Reaction

Matt Connelly, independent CME Group floor trader, says the report data is bearish. "It's very bearish for soybeans and wheat. It's slightly bearish corn. Plus, Chinese corn production number was bigger than previous. So, corn should be lower today," Connelly says.

Jason Ward, Northstar Commodity Investment Co. analyst agrees the report data is negative for the grain markets. "Bearish across the board, both US and Global numbers. The report shows less demand in all categories domestically and larger crops globally," Ward says.

Ward adds, "The only hope for the bulls is that funds take some profits on short wheat."

Discuss USDA data and corn, soybean and wheat markets in Marketing Talk. 

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Report 12/09/2011 @ 8:53am Told you it was gonna be bearish of course the USDA is gonna find ways too keep knocking the prices down it looks better to investors who cares about the farmer just make sure the USDA and cbot make plenty of money.

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