Report Reaction/Early Call

The eagerly awaited USDA report failed to throw anything at us that wasn't largely already expected by the trade (for once).

Both corn and soybean acreage came in a bit below the average trade guess, with all wheat around half a million above the mean estimate.

The bottom line is beans area is seen increasing by 600,000 acres, or just 0.7%, to 78.1 million. Corn acres are seen up 2.3 million to 88.8 million, an increase of 2.7%. All wheat plantings are seen down by 5.27 million acres to 53.83 million, a fall of around 9% on last season.

Spring wheat plantings are seen rising by 4.6%, partially offsetting a decline in winter sowings of 12.9%.

Cotton area is seen up around 15%, with rice plantings up about 9%.

Overall though, the figures show a reduction in planted area of around 1.5 million acres on last season. That seems pretty questionable. I'd expect final corn and soybean area to maybe increase from these figures.

On the stocks front corn and soybeans came in higher than expected and wheat lower.

The bean number was a tad surprising at 1.270 billion bushels, that was right at the top end of the range of analysts estimates, despite the strong pace of US exports so far this season.

The corn stocks estimate was also close to the top end of the range of trade guesses. Although the wheat stocks number was a little below the average trade guess, at 1.352 billion bushels it is still fully 30% up on a year ago.

Elsewhere in the market the dockers strike in Argentina appears to be ongoing. Japan reportedly bought Indian soymeal in preference to cheaper Argy material overnight.

South Korea has bought 281,000 MT of US corn for 2009/10 delivery.

Early calls for this afternoon's CBOT session: beans called down 10-15 cents; corn called down 4-6 cents; wheat called down 1-3 cents.