USDA data seen as friendly
The U.S. farmers will grow slightly less corn and higher amounts of soybeans in 2012 than previous thought, USDA announced in its monthly report Thursday. But, the tighter ending stocks are the figures that are moving Thursday's markets higher.
As a result, today's farm markets are expected to trade higher when the CME Group session opens at 9:30am CT.
In its October Crop Production and Supply/Demand Reports, the USDA estimated the U.S. 2012 corn production at 10.706 billion bushels vs. the USDA's September estimate of 10.727 billion and the average trade estimate of 10.598 billion.
Regarding yield, the USDA Thursday pegged the U.S. corn estimate at 122 bushels per acre vs. the average trade estimate of 122.7 bu./acre and the government's previous estimate of 122.8 bu./acre.
For U.S. 2012 soybean production, the USDA estimates a crop of 2.86 billion bushels, compared to the average trade estimate of 2.77 billion bushels and the USDA's previous estimate of 2.634 billion.
Also, the U.S. 2012 soybean yield is pegged at 37.8 bu./acre vs. the average trade estimate of 37.0 bu./acre and the USDA's previous estimate of 35.3 bu./acre.
The USDA lowered the U.S. 2012-13 corn ending stocks to 619 million bushels from 733 million in September. For soybeans, U.S. 2012-13 ending stocks were raised to 130 million bushels from 115 million in its September report.
Jack Scoville, PRICE Futures Group vice president, says the report was not real bullish on its face, but the market is reacting that way.
"The numbers on the headlines are really not so bullish compared to expectations, but a very strong reaction anyway. I think part of it is 'sell the rumor and buy the fact'. Part of it for corn must be area and yield, too. Yield cut slightly in the report and area harvested is up, which I am not sure is being believed real well," Scoville says.
The USDA made no significant cuts in domestic demand for beans and corn at all, which is bullish, analysts say.