The USDA Numbers Bearish For Corn

Posted by Nogger - a legend in his own mind at 14:02 | Categorized as

30/09/11 -- The USDA numbers threw up a bearish corn stocks figure of 1.128 billion bushels as of September 1st, 166 million bushels more than the 962 million that the trade was expecting and higher than even the highest trade estimate.

Just about everybody was expecting a sub-one billion number, so the USDA seem to have thrown a spanner in the works for corn bulls for the second year running with this report.

For wheat the news was mixed, with Sept 1st stocks 104 million bushels higher than expected at 2.15 billion, but all wheat production in 2011 a little lower than anticipated at 2.008 billion (2.046 billion expected). Spring wheat production this season was the reason for the fall in output, that was lowered to 462 million bushels, 36 million below the average trade estimate.

For soybeans Sept 1st stocks were a fraction below trade expectations of 225 million bushels at 215 million.

The overnight Globex market closed around 4-5 cents lower on corn and soybeans and narrowly mixed on wheat prior to the USDA report being issued. European markets reacted swiftly with London wheat down GBP3.00-4.00/tonne and Paris wheat falling EUR4.00-5.00/tonne lower shortly after the news came out.

In other news the USDA have just announced the sale of 176,000 MT of US corn to South Korea for Jan 2012 shipment.

Russia, and now Kazakhstan too, continue to undercut the rest of the market for a slice of Egypt's wheat business and that doesn't look like changing any time soon unless the world's largest wheat buyer decides to pay more for the privilege of not having all it's eggs in the one bread basket.

Early calls for this afternoon's CBOT session: corn down 20-25 cents, wheat down 10-12 cents, soybeans down 8-10 cents.