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Preview USDA's WASDE data

Jeff Caldwell 04/09/2013 @ 3:19pm Multimedia Editor for Agriculture.com and Successful Farming magazine.

If Wednesday's monthly USDA World Agricultural Supply & Demand Estimates (WASDE) report shows a U.S. corn carryout lower than 824 million bushels, look for a bullish response by the trade, analysts and traders said Tuesday.

Traders agree the 824-million-bushel mark is the tipping point between support and weakness for corn prices moving ahead after Wednesday's USDA numbers, which include a monthly Crop Production report that's expected to show a struggling Plains winter wheat crop. Above 824 million and expect a bearish response, says Greg Wagner, President, GWX Ag Advisors.

"Right now, you're looking at corn ending stocks being 824 million bushels, up substantially from 632 million bushels carrying in the March report. That's going to come in the form of feed and residual use," Wagner said Tuesday. "To the extent USDA brings that into the balance sheet is going to determine really what the ending stocks number is right now. On the demand side of the equation, both for ethanol grind and exports, it'd be premature for USDA to lower either estimate, so those will be essentially unchanged."

The range of trade estimates heading into Wednesday's numbers is wider than normal, with the highest guess coming in at 925 million bushels, one Wagner says would "be pretty shocking." For soybeans, the trade's calling for domestic stocks of around 137 million bushels, witih anything larger than 140 million casting a bearish tone over the soybean pit moving forward. Recent history gives reason to think that there shouldn't be much, if any, surprise to Wednesday's soybean supply figure, says Jerry Gidel, Chief Feed Grain Analyst, Rice Dairy.

"Last fall, we had an abnormally low stocks number versus expectations, and there was talk maybe we overestimated the crop then, and now there's this number here," Gidel said Tuesday. "I think we had a huge amount in export channels. I don't anticipate much change in carryover stocks. Should be somewhat of a stabilizing situation when we get those stocks numbers tomorrow."

Weather worries ahead

Though there's some stability -- even some hints of price support moving ahead, especially for corn -- seen coming in Wednesday's USDA data, the wildcard moving forward continues to be Mother Nature. Though the drought's virtually ended in parts of the Corn Belt, it continues in others. At the same time, there's growing anxiety in the corn and soybean pits in Chicago about what a potentially tardy spring planting season could mean to prices, Gidel says.

"We've actually had a little recovery [in corn prices] the last couple days. It's a combination of being oversold and the weather situation across the U.S. Last year, we had fabulous weather and were already off to a great start, particularly in the southern areas," he says. "We had a tremendous amount of corn already planted. This year, there's maybe a little planted in Texas and Louisiana, and the rest of the Southeast and now the Midwest are getting additional rains. That may be a big factor in some [traders'] mindsets."

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