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USDA Releases Market-Friendly Data

DES MOINES, Iowa ( supplies of U.S. corn and soybeans, as of this August 31, continue to dwindle, USDA states Wednesday. As a result, the CME Group corn, soybean markets jumped initially after the release of the data. 

Since then, only soybeans remain stronger, while corn prices have given back some of their gains.

At 12 noon, the May corn futures contract is trading 1/4 cent higher at $5.07. The Dec. corn futures are trading 4 1/2 cents lower at $5.08. The May soybean futures contract is 16 1/2 cents higher at $14.99. The Nov. soybean futures are trading 9 1/4 cents higher at $12.26. May wheat futures are 13 3/4 cents lower at $6.67 per bushel. The May soymeal futures contract is trading $7.20 per short ton higher at $485.30. The May soyoil futures are trading $0.35 higher at $42.46.

In the outside markets, the Brent crude oil is $0.41 per barrel higher, the dollar is lower, and the Dow Jones Industrials are 79 points higher.

In its April Supply/Demand Report, the USDA pegged the U.S. 2013-14 corn carryout at 1.331 billion bushels, compared to the average trade estimate of 1.403 billion bushels and the government's previous estimate of 1.456 billion.

For soybeans, the USDA estimates U.S. 2013-14 stocks, as of August 31, 2014, at 135 million bushels, vs. the average trade estimate of 139 million bushels and the USDA's March estimate of 145 million.

U.S. 2013-14 wheat carryout is estimated at 583 million bushels vs. the average trade estimate of 581 million bushels and the USDA's March estimate of 558 million.

World Production

In its Wednesday report, the USDA pegged the 2012-13 Brazilian soybean output at 87.5 million metric tons, compared to the average trade estimate of 87.4 million metric tons and the USDA's March estimate of 88.5 million metric tons.

For Argentina, the USDA pegged the 2012-13 soybean production at 54.0 million metric tons, equal to the average trade estimate. For corn, the USDA sees the South American country's output at 24.0 million metric tons vs. the average trade estimate of 24.1 million metric tons.

Trade response

Peter Meyer, PIRA Energy senior grain analyst, says the USDA numbers provide food for the 'bulls.'

"Bulls need to be fed everyday. While corn ending stocks were 100 million bushels lower than expected, it’s hard to support the speculative length in the market," Meyer says  

The soybean carryout number of 135 million bushels was right in line with expectations, yet the high-frequency trading crowd, also long a lot of beans, takes the market up 30 cents on air? I know there are no beans left, and imports are a record, but what’s the exit strategy for the large speculative length in soy?" he says.

Wheat stocks were bearish and that will hold corn down, Meyer told in an email.

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