USDA Report Reaction

12/06/12 -- Well, Septic Peg called it correctly - the USDA numbers are bearish for corn. Neither old nor new crop US ending stocks were reduced as the trade expected, both being left unchanged instead at 0.851 and 1.881 billion bushels respectively.

In addition 2011/12 world ending stocks were raised more than anticipated to 129.2 MMT and 2012/13 global carryout was increased to 155.7 MMT when a reduction to 149.75 MMT was expected.

Brazil's corn crop was increased to 69.0 MMT, 2 MMT up on last month and 1.4 MMT above expectations. Argentina's meanwhile was lowered less than thought to 21.0 MMT, 0.6 MMT above trade ideas.

China's 2012/13 corn crop was raised 2 MMT to 195 MMT. China's import requirements for 2012/13 were unchanged at 7 MMT. The world corn crop for the season ahead was seen over 4 MMT higher at just under 950 MMT - easily a record.

For wheat, world production in 2012/13 was lowered 5.5 MMT to 672 MMT, although consumption was also reduced by 4.6 MMT to 681.9 MMT.

Europe's wheat crop was cut by 1 MMT to 131 MMT and Russia's reduced 3 MMT to 53 MMT in 2012/13.

World wheat ending stocks were trimmed 2.4 MMT to 185.8 MMT, although this was less than expected. US wheat carryout for both old and new crop was cut by a bit more than anticipated.

For soybeans we had US old crop carryout cut from 210 million bushels to 175 million, and new crop ending stocks were reduced from 145 million to 140 million - both by a wider margin than expected.

Brazil's 2011/12 soybean crop was raised 0.5 MMT to 65.5 MMT, in line with expectations. Argentina's was cut by 1 MMT to 41.5 MMT, versus the anticipated 1.8 MMT cut to 40.7 MMT.

China's 2011/12 soybean imports were increased 1 MMT to 57 MMT and those for 2012/13 left unchanged at 61.0 MMT.

It looks bullish soybeans, bearish corn and neutral on wheat to me.