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USDA data seen bullish

01/11/2011 @ 6:13pm

CHICAGO, Illinois (Agriculture.com)--The USDA released bullish Crop Report data Wednesday, market traders and analysts say.

In its January World Agricultural Supply and Demand Estimates (WASDE) Report, the USDA dropped the U.S. 2010 corn and soybean production and ending stocks. Worldwide, the USDA  cut the Argentine corn production estimate, due to a continued drought weather pattern that is hurting that country's pollination season.

As a result of the USDA numbers, CME Group floor traders see the Wednesday Early Calls as follows; corn up 7-10 cents,  soybeans up 15-20 cents, and wheat 10-15 cents higher.

Jack Scoville, PRICE Futures Group vice-president, says the report is friendly, but not surprising. "No shocks at first glance this morning, but there is really nothing negative here as well. Only wheat seedings could be construed as potentially a little bearish, I suppose. But not really.  Stocks and production and ending stocks estimates are all at the lower end or below trade estimates," Scoville says.

He adds, "We were strong overnight and the dollar is lower. So, we should be able to at least maintain the overnight gains and possible move higher."

Matt Pierce, GrainAnalyst.com analyst and CME Group floor trader agrees the WASDE Report is friendly for grain prices. "Bullish report but nothing dramatic. The USDA hedged bets again by leaving corn exports flat and lowering feed. My question is, if you lower feed in wheat and corn what's left for the livestock to eat?"

U.S. 2010 PRODUCTION

For corn, the USDA estimates 2010-11 production at 12.447 billion bushels, below the average trade estimate of 12.491 billion and below the USDA's December estimate of 12.540 billion bushels. The U.S. corn yield is estimated at 152.8 bushels per acre, lower than the average analysts estimate of 153.9 and the USDA's December estimate of 154.3.

For soybeans, the USDA lowered the U.S. 2010 production at 3.329 billion bushels, below the average trade estimate of 3.376 billion bushels and the USDA's December estimate of 3.375 billion. In its report Wednesday, the government agency dropped the U.S. 2010 soybean yield at 43.6 bushels per acre vs. the average trade estimate of 44.0 bushels per acre and the USDA's December estimate of 43.9.

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