Market yawns at USDA report
Prices were higher overnight, 1 in wheat, 3 corn and 9 beans, encouraged by the weak $, which remains lower this am. We expect a higher start, roughly similar to overnight gains, this am: 1-2 wheat, 3-5 corn and 10 beans. Short term, the market finally appears to have found a bottom and is headed higher.
The Jan USDA crop report was a major bearish shock to the market. In sharp contrast, this morning's Feb USDA report only elicited a yawn from the market. Most of the numbers were either in line or close enough so as to not cause much of a reaction. In general, the report was mostly neutral wheat, friendly corn and beans. There are no major surprises. The US carryover estimates are a little lower than expected for corn and beans, a little higher than trade ideas for wheat. The world numbers are almost unchanged for wheat and beans, lower for corn. The USDA raised their estimate of China's bean imports for the 2009-10 crop year from 42 million to 42.5 million tonnes. They hiked their estimate of the amount of US corn used to make ethanol in 2009-10 from 4.2 to 4.3 billion bushels but left unchanged the amount of bean oil used to make bio diesel fuel (methyl ester) at 2.2 billion lbs.
Conab, a division of the Brazilian Agriculture Dep't, estimated Brazil's bean crop at 66.7 million tonnes today vs their Jan guess of 65.1 million. Last year, Brazil produced 57.1 million tonnes of beans. According to Reuters newswire, Conab raised their corn guess from 51.4 million tonnes in Jan to 50.5 million now. Reuters either transposed these two numbers or put out incorrect ones. I will let you know as soon as I see a corrected version. Conab's wheat guess was unchanged from before at 5.0 million tonnes. Last year, Brazil produced 5.9 million tonnes of wheat.
Argentina was dry the last 24 hours with more dry weather forecast today. A few light, scattered showers are forecast tomorrow-Thursday with better rain predicted over the weekend. Brazil will remain wet most of this week with rain continuing into next week in the south. Conditions remain very favorable overall in both Brazil and Argentina.
Colder temps in the US Midwest and southwest will not be cold enough to damage the dormant winter wheat crop.
The Jan USDA crop report was a major bearish shock to the market. In sharp contrast, this morning's Feb USDA report only elicited a yawn from the market. Most of the numbers were either in line or close enough so as to not cause much of a reaction. In general, the report was mostly neutral wheat, friendly corn and beans. There are no major surprises. The US carryover estimates are a little lower than expected for corn and beans, a little higher than trade ideas for wheat. The world numbers are almost unchanged for wheat and beans, lower for corn. The USDA raised their estimate of China's bean imports for the 2009-10 crop year from 42 million to 42.5 million tonnes. They hiked their estimate of the amount of US corn used to make ethanol in 2009-10 from 4.2 to 4.3 billion bushels but left unchanged the amount of bean oil used to make bio diesel fuel (methyl ester) at 2.2 billion lbs.
Conab, a division of the Brazilian Agriculture Dep't, estimated Brazil's bean crop at 66.7 million tonnes today vs their Jan guess of 65.1 million. Last year, Brazil produced 57.1 million tonnes of beans. According to Reuters newswire, Conab raised their corn guess from 51.4 million tonnes in Jan to 50.5 million now. Reuters either transposed these two numbers or put out incorrect ones. I will let you know as soon as I see a corrected version. Conab's wheat guess was unchanged from before at 5.0 million tonnes. Last year, Brazil produced 5.9 million tonnes of wheat.
Argentina was dry the last 24 hours with more dry weather forecast today. A few light, scattered showers are forecast tomorrow-Thursday with better rain predicted over the weekend. Brazil will remain wet most of this week with rain continuing into next week in the south. Conditions remain very favorable overall in both Brazil and Argentina.
Colder temps in the US Midwest and southwest will not be cold enough to damage the dormant winter wheat crop.
posted by InsightPublishing at
8:29 AM
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