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USDA breathes some life into corn bulls

Jeff Caldwell 03/08/2013 @ 11:46am Agricultural content creator and marketer.

U.S. corn stocks didn't change over the last month on increased imports and decreased exports, USDA said in its monthly World Agricultural Supply and Demand Estimates (WASDE) report released Friday. Now, the crop world is looking ahead to the big USDA grain stocks report due out later this month for clarification as to just how tight grain stocks -- especially for corn -- really are in the U.S.

Friday's report shows U.S. corn ending stocks didn't move on account of higher imports and lower exports in the face of consistent feed and residual use. Imports went up 25 million bushels and exports slid 75 million, the latter "based on the slow pace of sales and shipments to date and stronger than expected competition from South American corn and from competitively priced feed-quality wheat," according to the report.

The net price effect of the static corn stocks estimates released Friday is a trimming of 20 cents off the high end. Now, USDA sees a $6.75- to $7.45/bushel price range for corn.

The report's relative balance for domestic corn supplies shows that sights are already zeroing in on March 28, when USDA will release its annual Prospective Plantings and Quarterly Grain Stocks reports. That's especially true because of the continued tightness in domestic stocks that Friday's report did little or nothing to indicate otherwise, says Don Roose, broker and market analyst with U.S. Commodities in West Des Moines, Iowa. Numbers did fluctuate, but the net message was clear.

"This tells us that the government is looking forward to the stocks report now, and they did take some unusual steps ahead of that report. They left ending stocks unchanged, but did make some changes to the corn balance table to compensate for that, taking the feed usage up 100 million bushels and taking exports down 75 million bushels," Roose says. "What they're saying is the balance table is tight and we're going to import more corn to balance it but we're not going to really feed any more wheat. That was maybe a little surprising.

"It tells you how tight things are. We're tight enough to import more corn, but not willing to jump in and use more wheat."

Soybean & corn prognoses

While corn took the spotlight in some ways, it's the soybean side that still lacks some clarity, especially after Friday's USDA report. Though he agrees corn stocks are tight as a drum, it's the domestic supply of soybeans and USDA's guess on Friday that raises some red flags for Sal Gilbertie of Teucrium Trading.

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