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Grains sell off after USDA reports

02/10/2012 @ 12:56pm

The grain markets fell after the most recent USDA reports were published Thursday.

The Dow, however, is up 28.23 points to close Thursday at 12,890.46 after Greece’s debt issues were resolved for the time being.  Oil followed on increased demand prospects adding $1.99 a barrel to close at $99.72 today.  Gold has met resistance in the $1,750 area ultimately ending trade at $1,731.90 Thursday, up $3.60 an ounce this week.  The dollar index has fallen modestly as the Euro has rallied.  The grains have been hurt the most.

Corn had choppy, sideways trade for most of the week in anticipation of the USDA reports to be released today.  After the release, corn moved to its highest point in several weeks only to sell off into the close.  Overall, the grain is down 7 ½ cents for the week settling at $6.37 on the March contract today.  Export projections were increased 50 million bushels, while ending stocks were lowered by 45 million bushels.  Weekly export sales were reported as 694,100 MT, which is down 23.9% from last week.

Soybeans like corn were fairly quiet this week, but Thursday changed that pattern. The oilseed traded in a wide 25 cent range after the report was released.  Little was changed in the reports leaving the market searching for a direction.  Chinese demand prospects are providing underlying fundamental support, though exports are far behind the pace needed to meet the USDA projections.  Export sales this week were reported as 603,200 MT, which is up 95.6% from last week.

Wheat received the biggest surprise in the reports Thursday as ending stocks were reduced by an unanticipated 25 million bushels.  However, global ending stocks were revised higher to an all-time record.  This revision sent the grain down sharply and for the week is off 14 ¾ cents to $6.46 on the March CBOT contract.  Export projections were raised 25 million bushels due to better than anticipated sales to date.  For the week, export sales were report as 707,900 MT, which is up 36.4% from last week.

The most recent fundamental news was released this morning and the grain markets rose only to fall sharply later.  A mid-session reversal came sending the markets ultimately lower on the day and for the week.  The outside markets have been mostly positive this week as debt concerns in Greece have subsided for the time being.  

Producers and traders will now begin to focus on this summer’s crop and the Planting Intentions report to be released on March 30.

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