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USDA Data Drops Soybeans 36¢ Monday

The U.S. farmers harvested fewer soybean acres than first thought and the soybean stocks, as of Dec. 1, are smaller than previous estimates, according to the USDA and WASDE Reports released this morning. Perhaps the most negative to the market, though, is the fact that the USDA didn’t change its estimate for 2014-15 soybean ending stocks.

As result, the CME Group corn, soybean and wheat markets responded mostly negatively Monday, following the USDA January Supply/Demand and WASDE Crop Production Reports.

At the close, the March corn futures settled 1 3/4 cents higher at $4.02 per bushel.

March soybean futures finished 36 1/4 cents lower at $10.16.

March wheat futures settled 8 1/4 cents lower to $5.55. The March soybean meal futures closed $7.90 per short ton lower at $341.20. March soyoil futures closed $1.08 lower at $32.60.

In the outside markets, the crude oil market is $2.44 lower per barrel, the U.S. Dollar is higher and the Dow Jones Industrials are 93 points lower.

TRADE REACTION

Sal Gilbertie, Teucrium Trading, says that larger than expected downward revisions to corn yields and corn ending stocks are the only surprises to speak of in this report.  "Continued strong global demand for soybeans is the main contributing factor to all-time high demand for US soybeans, led by a very strong, record high US export number. Global wheat supplies seem adequate, which is welcome news for end-users and consumers cautiously watching Ukraine and Russian export levels,” he says.

Overall, the report confirms record demand levels for soybeans and corn, Gilbertie says. “From this point onward, traders and investors will likely focus on the ability of farmers in the coming crop year to meet growing and record global demand for grains."

U.S. HARVESTED ACRES

The USDA pegged the U.S. 2014-15 corn harvested acres at 83.1 million, compared to the government’s December estimate of 83.0 million and the average analysts estimates 82.8 million.

For soybeans, the USDA estimate the U.S. 2014-15 harvested acreage at 83.2 million, vs. the average analysts estimate of 83.1 million and the USDA’s December estimate of 83.4 million.

2014-15 GRAIN PRODUCTION

In its report, the USDA pegged  2014-15 U.S. soybean production at 3.96 billion bushels, compared to the average analyst estimate of 3.965 billion bushels, and the USDA’s December estimate of 3.958 billion.

For U.S. 2014-15 corn, the production is pegged at 14.21 billion bushels, compared with the average estimate of 14.366 billion bushels, and the USDA’s December estimate of 14.407 billion.

QUARTERLY GRAIN STOCKS

The Quarterly Grain Stocks Report, showing stocks on-hand as of Dec. 1, 2014, are market negative for corn and soybeans.

USDA estimates the Dec. 1 soybean stocks at 2.523 billion bushels, vs. the average analysts estimate of 2.608 billion bushels.

For corn, stocks were pegged at 11.203 billion bushels, compared with the average analysts estimate of 11.161 billion.

USDA sees the Dec. 1 wheat stocks at 1.52 billion, vs. the trade’s expectations of 1.501 billion bushels.

U.S. 2014-15 CARRYOUT

For U.S. 2014-15 soybean carryout, the USDA sees 410 million bushels, compared with the trade’s expectations of 402 million bushels and the USDA’s December estimate of 410 million.

In its report, the USDA estimates the U.S. 2014-15 corn carryout at 1.877 billion bushels, vs. the trade’s expectations of 1.94 billion bushels, and the December USDA estimate at 1.998 billion bushels.

For U.S. 2014-15 wheat, the USDA sees the carryout at 687 million bushels vs. the trade’s expectations of 663 million.

Jack Scoville, PRICE Futures Group vice-president, says that soybeans show nothing terribly bearish on their own, but USDA left ending stocks unchanged and world stocks estimated a little higher than expected too.  “That means that our export program is about over, in the eyes of USDA, and that is the reason for the weakness.”

The report showed nothing bearish at all in corn, Scoville says. “A little less production and stocks have supported that market and buying near $3.95 is not a bad idea, if you can.”  

Wheat was mixed, with less planted area and quarterly stocks. “But, we have troubles moving wheat. So, wheat is having trouble with the rally. The beans depend as much on the close as anything else. But, given the good weather in South America and the signals by USDA on demand, the burden is on the bull rather than the bear right now.”

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