USDA Report Reaction

Posted by Nogger - a legend in his own mind at 14:03 | Categorized as

12/09/12 -- The eagerly awaited USDA report is out and as per usual (and Septic Peg's prediction) there are a few surprises in there.

Peg was right in saying that the trade wasn't going to get the bullish corn report that they were expecting. US corn yields were only trimmed marginally from last month's 123.4 bpa to 122.8 bpa, 2.2 bpa more than the average trade guess.

That puts 2012 US corn production at 10.727 billion bushels, right at the top end of trade estimates and 324 million above the average trade guess. Old crop 2011/12 corn ending stocks were also raised, taking new crop 2012/13 US carryout to 733 million bushels, 83 million up on last month, and contrary to trade expectations for a 32 million bushel cut.

US corn demand from the ethanol sector was left unchanged at 4.5 billion bushels, or 42% of the crop.

For beans, the trade guesses were closer to the mark, with US yields this year cut from 36.1 bpa last month to 35.3 bpa this time round vs the average trade guess of 35.5 bpa. The 2012 US soybean crop came in almost exactly as expected at 2.634 billion bushels, with old crop carryout cut a bit more than expected to 130 million bushels from 145 million last month.

New crop 2012/13 US ending stocks were however left unchanged from last month at 115 million bushels. As too were wheat stocks at 698 million.

On a global level 2012/13 ending stocks came in higher than anticipated for corn, wheat and soybeans. Although the latter two were trimmed slightly from last month, they weren't cut as much as expected and world corn stocks were actually raised a tad.

They cut Russian wheat output this year to 39 MMT, which brings them into line with other trade forecasts. Kazakhstan's wheat crop was cut half a million to 10.5 MMT, but Ukraine's was raised a similar amount to 15.5 MMT. Australian wheat output was inexplicably left unchanged at 26 MMT, with the rest of the world lining up in the 22-23 MMT region.

Also of note creeping in off the radar screen a little was a 4.5 MMT cut to EU-27 corn output this year, to 57.14 MMT from 61.54 MMT previously.