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USDA data seen as bearish

05/11/2011 @ 7:46am

CHICAGO, Illinois (Agriculture.com)--The USDA released bearish data Wednesday, by raising the U.S. old-crop corn and soybean endings stocks.

See full report http://www.nass.usda.gov/Publications/index.asp

CME Group floor traders are calling corn to open 20 cents lower, soybeans 20-30 cents lower, and wheat 10-20 cents lower Wednesday.

Jason Ward, Northstar Commodity Investment Inc. analyst, says the report is bearish across the board. "Not one friendly number, according to estimates. They slashed exports for next year to 1.8 billion bushels, assuming prices will stay high for this number to be attained." Ward adds, "Otherwise, that number is likely too low. Feed usage was also lowered by 50 million bushels, but that was offset by an increase in corn used for ethanol by the same amount."

Carryout

In its May Production and Supply/Demand Reports, USDA estimated the 2010-11 U.S. corn carryout at 730 million bushels vs. the trade expectation of 665 million bushels and its April estimate of 675 million bushels.

Because this number is at a 15-year low, the market is monitoring the government's  estimate closely.

For 2011-12, the U.S. corn carryout is estimated at 900 million bushels vs. the average analyst estimate of 811 million. This is the first new crop carryout number of the year by the USDA, in this World Agricultural Supply and Demand Estimates (WASDE) report. 

"Both old crop carryovers of corn and soybeans swelled, which also cushions the negative blow a little. This report is fine, it gives us a little cushion for yield adversity and the likelihood is that corn acres come down in the June report. The odds of us planting 92.2 million corn acres is low. So that gives you some cushion to lower those acres," Ward says.

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