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WASDE data pressures soybeans

DES MOINES, Iowa (Agriculture.com)--The USDA released bearish world soybean data Friday. However, its February Supply/Demand and World Production Reports support for wheat markets.

As a result, the soybean market dropped 12 cents, after the numbers were released at 11:00am CT Friday. 

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Jason Ward, Northstar Commodity analyst, says the report's U.S. numbers were a little friendly to soybean and wheat fundamentals, while slightly negative to corn.

"But, since this is already built into the market, the prices are not following suit," Ward says.

Meanwhile, it is the world numbers that are bearish across and probably limit any upside, Ward says. 

For the 2012-13 marketing year (ending Sept. 1), the USDA estimates the U.S. corn carryout at 632 million bushels vs. the average analyst estimate of 615 million bushels and the government's January estimate of 602 million. 

USDA sees the 2012-13 U.S. soybean carryout at 125 million bushels vs. the average analyst estimate of 129 million bushels and the USDA's January estimate of 135 million.

The U.S. 2012-13 wheat carryout is pegged at 691 million bushels compared to the average analyst estimate of 728 million bushels and the USDA's January estimate of 716 million.

WORLD PRODUCTION

USDA pegged the 2012-13 Brazilian corn production at 72.5 million metric tons vs. the average analyst estimate of 71.1 mmt and the USDA's January estimate of 71.0 mmt. 

For soybeans, Brazil's 2013 production is estimated at 83.5 mmt vs. the average analyst estimate of 83.1 mmt and the USDA's previous estimate of 82.5 mmt.

Argentina's 2013 corn production is estimated at 27.0 mmt vs. the average analyst estimate of 26.6 mmt and the USDA's previous estimate of 28.0 mmt.

In its report, the USDA pegged the 2013 Argentina soybean crop at 53.0 mmt vs. the average analyst estimate of 53.0 mmt and the USDA's previous estimate of 54.0 mmt.

"The wildcard is the fact that traders are short covering in the wheat, which if that happens could support corn. Remember corn down 30 cents coming into today so a bounce at anytime could occur," Ward says.

Even though the market reacted negatively to the soybean market, it's hard to be too bearish to beans with carryout declining 10 million bushels. "But, world totals increased in South America."

Even though the market reacted negatively to the soybean market, it's hard to be too bearish to beans with carryout declining 10 million bushels. "But, world totals increased in South America." 

Sal Gilbertie, Teucrium Trading, says the focus now shifts to the tightness of U.S. soybean stocks.

"It appears that significant price rationing has not yet occurred in the bean complex, and that US soy exports will hold steady due to healthy global demand."

On a global basis, it is also predicted that the world will use more corn that it produces by about 13 million tons, Gilbertie says. "This might continue to put pressure on end-users of old crop corn as supplies remain tight. The markets will be watching South American production and exports very closely for the remainder of the crop year, Gilbertie says."

Like last year, the importance of a large, early North American harvest for both corn and soybeans will loom large in traders’ minds as they look to see if farmers can replenish historically low stock levels in both soybeans and corn and alleviate severe late-summer price rationing in old crop supplies, Gilbertie says. 

"Wheat markets remain balanced, even as demand in the US increases slightly resulting in slightly lower ending inventories for this crop year." 

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