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Markets unimpressed with USDA data

The USDA has lowered the amount of U.S. soybeans to be on hand, at the end of the marketing year, while leaving exports, as of August 2013 left unchanged.

As a result of a lot of unchanged data in the December USDA WASDE Reports, the overnight CME Group corn, soybeans and wheat markets trading lower at 8:00am CT.

As of 8:15am, the March corn futures are trading 4 cents lower at $7.26 per bushel. The January soybean futures are trading 5 cents lower at $14.69 per bushel. For March '13 wheat, futures prices are 16 cents lower at $8.32.

For soybeans, the USDA lowered its 2012-13 U.S. soybean carryout to 130 million bushels, from 140 million in November.

In its report, USDA left unchanged the U.S. 2012-13 corn carryout to 647 million bushels vs. its November estimate of 647 million bushels.

For U.S. wheat, the USDA sees 2012-13 carryout levels at 754 million bushels vs. the November estimate of 704 million bushels.

Trade Reaction

Tim Hannagan, Alpari (U.S.) senior grain analyst, says today's report offers no surprises.

"Everything came in-line with pre-report estimates. We'll see choppy, two sided trade for corn and beans, today. This shows report day traders were disappointed in the numbers. Generaly, on report day, if its not bullish we finish bearish," Hannagan says.

Alan Brugler, President of Brugler Marketing & Management LLC, says the report won't help the bulls much.

"The report shows soy oil exports are estimated up 50% from last month. That number was expected to be higher, but that is a major revision," Brugler says.

The government increased soymeal crush, but meal and oil exports soaked up all of the extra production, he says.

"The fact that the world ending stocks for soybeans were not changed much won't help the bulls to extend the rally," Brugler says.

Wheat numbers are bearish, with US exports cut 50 million (expected, but not in the trade average guess), he says. World stocks up nearly 3.0 mmt.

"Weak wheat will tend to be a drag on corn, which saw almost no changes except for a tame .5 mmt cut in Argentine production," Brugler says.

Meanwhile, the USDA lowered cash average prices across the board.

Jack Scoville, PRICE Futures Group vice-president, says the reports are mostly as expected by the trade, except for the wheat data.  

"The world wheat data is bearish, as more production and ending stocks shown.  Australia production went up which I am not sure I understand. Argentina's crop production numbers were unchanged which I also do not understand," Scoville says.  

The report is seen as neutral-to-friendly, with no changes to U.S. numbers, Scoville says.

"The same for soybeans, with the report indicating increased crush, but exports left unchanged takes some of the bullishness out of it," Scoville says.

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