USDA Quick Reaction/Early Call

There's a lot of data to sift through, here's some quick reaction to the most striking numbers:

US 2010 soybean yields and final production were raised not lowered as expected, that makes 2010/11 carryout 46 million bushels higher than anticipated at 350 million.

World wheat production was dropped 2.72 MMT, not as much as the 4 MMT expected, and thanks to reduced usage at these levels global 2010/11 ending stocks were actually raised by just over 3 MMT. That's one in the eye for the wheat bulls.

EU-27 wheat output was dropped from 137.51 MMT last month to 135.13 MMT, Russian production came down 2.5 MMT to 42.5 MMT. Canadian output was raised 2 MMT to 22.5 MMT.

For corn US and world production was dropped around 5 MMT with world ending stocks falling by 3.64 MMT to 135.6 MMT. That's just under 60 days worth of supply, the 3rd tightest of the past 35 years.

The numbers are being called neutral for corn and wheat and bearish beans.

We now need to wait and see if the large increase in fund longs on corn of late have the appetite to push things even higher towards USD5/bushel. The wheat numbers could have been a lot worse, and the increase in world ending stocks is certainly a bearish surprise. Whilst US 2010/11 ending stocks were reduced a bit more than anticipated, they are still almost three times those of 2007/08.

Beans look set to open lower in what could eventually turn out to be a tug of war with corn. Personally I'd say that the wheat numbers are also mildly bearish which might tip things in favour of this afternoon being a down day.

Early calls from the floor are 3-5c down on beans, wheat mixed and corn 2-4c higher.