Chicago - Post USDA Report

11/01/13 -- Soycomplex: Jan 13 Soybeans closed at USD14.24 3/4, up 7 1/4 cents; Mar 13 Soybeans closed at USD13.73 1/4, down 6 1/2 cents; May 13 Soybeans closed at USD13.64, down 7 1/2 cents; Jan 13 Soybean Meal closed at USD403.10, down USD5.60; Jan 13 Soybean Oil closed at 48.88, down 51 points. As expected it was a choppy session. Jan 13 beans closed near to the session highs and almost 23 cents above the lows of the day. Other old crop months were around 8 cents off the highs but 20 cents above the lows. New crop Nov 13 closed the weakest, at more than 20 cents off the highs of the day. The USDA raised 2012 US soybean yields from 39.3 bu/acre to 39.6 bu/acre, exactly as the trade guessed. That increased production in 2012 from 80.86 MMT to 82.06 MMT. Despite the recent very strong pace of US exports, they were only left unchanged at 36.6 MMT. The higher US production was offset in part by an increased domestic crush. Ending stocks were increased slightly from 130 million bushels to 135 million, again exactly in line with the average trade forecast. The Brazilian soy crop was increased from 81 MMT to 82.5 MMT, which was partially offset by a reduction for Argentina, from 55 MMT to 54 MMT. Brazil's export potential was increased from 37.4 MMT to 38.4 MMT and Argentina's reduced from 12 MMT to 11 MMT. This re-enforces Brazil as the world's top exporter of soybeans in 2012/13, usurping the US to the tune of around 1.8 MMT. The bottom line sees world 2012/13 ending stocks at 59.5 MMT, around half a million lower than last month and a bit more than that beneath the average trade forecast.

Corn: Mar 13 Corn closed at USD7.08 3/4, up 10 cents; May 13 Corn closed at USD7.07, up 9 1/2 cents. Corn jumped around 30 cents immediately after the USDA numbers came out pegging US 2012/13 ending stocks at 602 million bushels (15.3 MMT), which was well below the average trade guess of 667 million and 45 million lower than last month. US 2012 yields were raised by a bushel/acre more than anticipated to 123.4 bu/acre, with production increased from 10.725 billion bushels to 10.78 billion, contrary to expectations for a cut (due to a lower harvested area) to 10.626 billion. Ending stocks were cut however, due to an extra 300 million bushels of domestic US usage compared to last month. US export potential was cut, although maybe by more than some had expected, from 31 MMT to 26 MMT. Brazil's exports were forecast to rise 1.5 MMT from last month to 22.5 MMT and Argentina's were also increased, by 2 MMT to 22.5 MMT. Brazil's corn crop was increased by 1 MMT to 71 MMT and Argentina's by 0.5 MMT to a record 28 MMT despite planting delays. Other trade estimates, like Michael Cordonnier's 22.5 MMT, are still well below this level. China's import requirements were left unchanged at 2 MMT. US ethanol usage was left the same as in the December report. The tighter than anticipated US 2012/13 stocks number was the one that grabbed the attention, but even with a hefty reduction in US exports these still need to pick up from the recent pathetic pace to hit 26 MMT. Maybe that thought occurred to a few others as corn closed the day well off session highs.

Wheat: Mar 13 CBOT Wheat closed at USD7.54 3/4, up 10 1/4 cents; Mar 13 KCBT Wheat closed at USD8.07, up 10 1/2 cents; Mar 13 MGEX Wheat closed at USD8.45 1/4, up 6 cents. For wheat the headline grabber was winter wheat seedings right at the low end of the range of trade guesses of 41.7-44.7 million acres (with an average estimate of 42.6 million) at 41.8 million acres. Also of note were 2012/13 US ending stocks cut by 38 million bushels from last month to 716 million (19.5 MMT) versus trade expectations of 743 million and 754 million (20.5 MMT) last month. This was down to a 35 million bushel increase in domestic feed usage. US wheat exports were left unchanged at 29.5 MMT when many had been expecting a decrease. Argentine, Australian and Canadian export potential were all cut by 0.5 MMT each. This was partially offset by a rise of the same magnitude for both India and Russia. The bottom line saw world production trimmed by 800 TMT to 654.3 MMT, but global consumption was also cut by 500 TMT, meaning ending stocks are only seen 300 TMT lower than they were a month ago on an international level. No great reason for a huge rally there, by the end of the session CBOT wheat was around 20 cents off the intra-day highs. Funds were said to have been net buyers of around 6,000 contracts on the day. That would still leave them holding a sizable short in CBOT wheat however, which could stimulate buying interest on any further dips.