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January USDA Report Recap

After months of lower corn prices and what seemed like an
eternity of negative outlook, corn futures showed a flicker of life on January
10 after that day’s USDA report came out with a touch of a friendly tone.  It was not enough to suggest that corn needs
to go racing higher to $5.00, but it was enough to stop the recent bleeding.

The report came out and the news for corn was actually supportive.  2013/14 corn production was actually lower
than pre-report estimates.  Harvested
area for corn was raised 436,000 acres, but the estimated yield was lowered 1.6
bushels per acre to 158.8, reducing production 64 million bushels to 13.9

Projected corn use for 2013/14 was raised with feed and
residual use projected up 100 million bushels based on September-November
disappearance as indicated by the December 1 stocks estimate. Corn used to
produce ethanol was raised 50 million bushels reflecting continued strong
weekly ethanol production. A 50-million-bushel reduction in other food, seed,
and industrial use offsets the increase in use for ethanol. Corn ending stocks
for 2013/14 are projected 161 million bushels lower at 1.6 billion.

Also supportive news on report day, a follow up story
emerged regarding China and their recent rejection of corn and DDG’s. In
mid-December, China rejected some 10 shiploads of U.S. corn because it
contained the MIR162 trait, also known as Agrisure Viptera, produced by
Syngenta Ag. Rejection of about 2,000 metric tons of DDG soon followed, causing
panic in the market and shipments to China came screeching to a halt in fear they
would be rejected. That, in turn, caused a glut of product domestically and
sent prices of DDG plummeting to the lowest levels in nearly two years.
According to news reports, China has begun accepting some of the DDG shipments
that had been placed in quarantine, with reports that more and more DDG would
be accepted in coming weeks.

Turning to soybeans, today the USDA increased its soybean
production estimate, boosting production to 3.289 bb from its previous
projection of 3.258 bb. The USDA achieved this by increasing harvested acres to
75.87 ma from its previous 75.7 ma estimate and adjusted the national average
yield to 43.3 bpa from 43.0 bpa. The USDA pegged soybean stocks as of Dec. 1 at
2.148 billion bushels, which is slightly smaller than the average pre-report
estimate. It's the second-smallest soybean stocks figure since the 2003-04 marketing

The USDA tweaked its supply and demand table in response to
its 31 mb upward revision in production. The crush was increased by 10 mb and
exports were increased by 20 mb. This led to an unchanged ending stocks figure
of 150 mb, about even with the average trade estimate, with an ending
stocks-to-use ratio of 4.5%.

Globally, USDA now estimates Brazil will grow 89 mmt of
soybeans, up 1 mmt, while Argentina production was left unchanged at 54.5
mmt.  Overall, the global ending stocks
figure for soybeans came in at 72.33 mmt, up 1.71 mmt on larger global
production. The stocks figure was higher than the range of pre-report
estimates. It is this higher amount of soybeans globally that will keep the new
crop prices under pressure for now.

It may be a year of quiet prices for corn and soybeans and
gone are extreme high prices from the past two years. It will also likely be a
year where prices trade at or near cost of production for most of the year,
making it extra important to be aware of what the market is doing all year long
and to keep track of your weighted average price and how it compares to your
cost of production. The market has been generous to producers and many have
slacked on their marketing skills, and now it’s time to re-gain focus.  Marketing is how you get paid for your hard

If you have questions, you can reach Naomi at, or
post a marketing question on the Women in Ag forum.


The data contained herein is believed to be drawn from
reliable sources but cannot be guaranteed. Neither the information presented,
nor any opinions expressed constitute a solicitation of the purchase or sale of
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of future results. Any reproduction, republication or other use of the
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Stewart-Peterson Inc. All rights reserved.

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