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Little change in WASDE report

Jeff Caldwell 12/11/2012 @ 8:00am Agricultural content creator and marketer.

In its monthly World Agricultural Supply and Demand Estimates (WASDE) report, USDA on Tuesday left corn and soybean stocks unchanged from last month's levels, showing what traders say has been an adjustment in demand that could be heading for a reversal back higher soon.

"U.S. feed grain supply and use projections for 2012/13 are unchanged this month, but price outlooks for corn and sorghum are lowered based on prices reported to date. The season-average farm price for corn is lowered 20 cents at the midpoint and the projected range is narrowed to $6.80 to $8.00 per bushel," according to Tuesday's report. "Prices received by farmers through October remained well below cash market bids and this year’s early corn harvest appears to have boosted early season marketings placing further downward pressure on the outlook for the season-average price."

USDA also sees soybean prices slipping lower, adding "Prices for soybeans and products are all projected lower this month.  The U.S. season average soybean price range for 2012/13 is projected at $13.55 to $15.55 per bushel, down 35 cents on both ends of the range. The soybean meal price is projected at $440 to $470 per short ton, down 15 dollars on both ends of the range. The soybean oil price range is projected at 49 to 53 cents per pound, down 2 cents on both ends."

The December WASDE report typically doesn't create the market fireworks that other major reports do, and that is exactly the case with Tuesday's report, says broker and market analyst with U.S. Commodities in West Des Moines, Iowa, Don Roose. Already, the trade is starting to turn to January's annual Crop Production report, which will be released on January 11 at 11:00 AM CST.

"The trade is anticipating that January report and any possible change in harvested acres," Roose says. "We're going to focus on South American weather and the anticipation of the January report."

That South American weather factor -- and any further changes in crop size in Brazil and Argentina -- could continue to underpin prices moving forward, especially with the support the soybean market's deriving from export demand, which is likely to continue.
"What [the report] really says is we have good export demand by China under this bean market," Roose says. "The corn market is sending the signal that exports are going to pick up here soon. When we get to these lower price levels, we start to get a little more interest there."

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