PF Reaction to a Bearish Set of Reports

November 9, 2012 02:19 AM
 

CROP PRODUCTION

CORN: 10.725 billion bu.; trade expected 10.629 billion bu.
-- compares to 10.706 billion bu. in Oct.; 12.358 billion bu. in 2011
BEANS: 2.971 billion bu., trade expected 2.891 billion bu.
-- compares to 2.860 billion bu. in Oct.; 3.056 billion bu. in 2011
COTTON: 17.447 million bales; trade expected 17.3 million bales
-- compares to 17.287 million bales in Oct.; 15.674 million bales in 2011

USDA now puts the national average corn yield at 122.3 bu. per acre, up 0.3 bu. per acre from the October estimate. USDA made no change to the harvested acreage estimate, leaving it at 87.721 million acres. That will continue to be a point of interest for the next two months as many traders don't believe USDA has accounted for all of the corn acres either abandoned or harvested as silage. USDA's next chance to adjust harvested acres will come in the January Annual Production Summary.

Looking at the state-by-state corn yield changes from last month, yields increased in: Illinois up 3 bu. (to 101 bu. per acre), North Dakota up 5 bu. (to 120 bu.) and Ohio up 2 bu. (to 125 bu. per acre). Yields were unchanged from October in Indiana (100 bu. per acre), Kansas (91 bu.), Minnesota (168 bu.), Missouri (75 bu.) and South Dakota (94 bu. per acre). Yields were down from October in: Iowa down 1 bu. (139 bu. per acre), Nebraska down 3 bu. (to 139 bu.) and Wisconsin down 2 (to 125 bu. per acre).

The national average soybean yield is now put at 39.3 bu. per acre, up 1.5 bu. per acre from USDA's October estimate. Harvested acres were unchanged from October at 75.693 million.

Looking at the state-by-state soybean yield changes from last month, yields increased in most of the major production states: Arkansas up 2 bu. (to 41 bu. per acre), Illinois up 4 bu. (to 43 bu.), Indiana up 3 bu. (to 44 bu.), Iowa up 1 bu. (to 44 bu.), Missouri up 1 bu. (to 31 bu.) and Ohio up 4 bu. (to 47 bu. per acre). (Ohio and Pennsylvania now have the highest average soybean yields in the country at 47 bu. per acre.) Yields were unchanged from October in Minnesota (43 bu. per acre), Nebraska (41 bu.) and South Dakota (28 bu. per acre).

USDA now puts the national average cotton yield at 802 lbs. per acre, up 7 lbs. from the October estimate. Harvested acreage was unchanged from last month at 10.443 million.

 

2012-13 U.S. CARRYOVER

CORN: 647 million bu.; up from Oct. proj. of 619 million bu.
-- compares to 988 million bu. in 2011-12

BEANS: 140 million bu.; up from Oct. proj. of 130 million bu.
-- compares to 169 million bu. in 2011-12

WHEAT: 704 million bu.; up from Oct. proj. of 654 million bu.
-- compares to 743 million bu. in 2011-12
COTTON: 5.8 million bales; up from Oct. proj. of 5.6 million bales

-- compares to 3.35 million bales in 2011-12

USDA increased total corn supplies 45 million bu. with the 19-million-bu. increase in estimated production and a 25-million-bu. increase in estimated imports (rounding makes up the difference). The increase in total supplies was partially offset by a 17-million-bu. increase in estimated food, seed and industrial use, pushing the tally to 5.867 billion bushels (corn-for-ethanol use was unchanged from October at 4.5 billion bushels). Feed & residual corn use was unchanged from last month at 4.15 billion bu. and the export estimate was unchanged at 1.15 billion bushels. USDA now puts the national average on-farm cash corn price at $6.95 to $8.25, down 15 cents on the bottom end and down a quarter on the top end of the range from last month.

USDA increased total soybean supplies 110 million bu., with the entire increase due to the bigger crop. That supply-side increase was partially offset by a 101-million-bu. increase in total demand. USDA increased estimated exports 80 million bu. (to 1.345 billion bu.) and crush was increased 20 million bu. (to 1.56 billion bu.). The end result is a 10-million-bu. increase in estimated 2012-13 soybean carryover. USDA now puts the national average on-farm cash price at $13.90 to $15.90, down 35 cents on both ends of the range from last month.

USDA left total wheat supplies unchanged from October. On the demand side, 50 million bu. were cut from estimated exports, dropping projected shipments to 1.1 billion bushels. USDA now puts the national average on-farm cash price at $7.75 to $8.45, up a dime on the bottom and down a dime on the top end of the range from last month.

USDA increased total cotton supplies by 160,000 bales from October, due to the bigger crop estimate. Domestic use and exports were unchanged from October, but USDA zeroed-out "unaccounted use" by decreasing the estimate 40,000 bales from last month. That increased carryover by 200,000 bales from October. USDA now puts the national average on-farm cash cotton price at 64 cents to 72 cents, up 2 cents on the bottom and down 2 cents on the top end of the range from last month.

 

2012-13 GLOBAL CARRYOVER

CORN: 117.99 MMT; up from Oct. proj. of 117.27 MMT
-- compares to 132.08 MMT in 2011-12
BEANS: 60.02 MMT; up from Oct. proj. of 57.56 MMT
-- compares to 56.00 MMT in 2011-12
WHEAT: 174.18 MMT; up from Oct. proj. of 173.0 MMT
-- compares to 197.89 MMT in 2011-12
COTTON: 80.27 mil. bales; up from Oct. proj. of 79.11 mil. bales
-- compares to 69.63 mil. bales in 2011-12

 

2012-13 GLOBAL PRODUCTION HIGHLIGHTS

ARGENTINA BEANS: 55.0 MMT; compares to 55.0 MMT in October
-- compares to 41.0 MMT for 2011-12
BRAZIL BEANS: 81.0 MMT; compares to 81.0 MMT in October
-- compares to 66.5 MMT for 2011-12
ARGENTINA WHEAT: 11.5 MMT; compares to 11.5 MMT in October
-- compares to 15.5 MMT for 2011-12
AUSTRALIA WHEAT: 21.0 MMT; compares to 23.0 MMT in October
-- compares to 29.52 MMT for 2011-12
CHINA WHEAT: 118.0 MMT; compares to 118.0 MMT in October
-- compares to 117.4 MMT for 2011-12
CANADA WHEAT: 26.7 MMT; compares to 26.7 MMT in October
-- compares to 25.26 MMT for 2011-12
EU-27 WHEAT: 131.82 MMT; compares to 131.58 MMT in October
-- compares to 137.23 MMT for 2011-12
RUSSIA WHEAT: 38.0 MMT; compares to 38.0 MMT in October
-- compares to 56.23 MMT for 2011-12
FSU-12 WHEAT: 77.79 MMT; compares to 77.71 MMT in October
-- compares to 114.8 MMT for 2011-12
CHINA CORN: 200.0 MMT; compares to 200.0 MMT in October
-- compares to 192.78 MMT for 2011-12
ARGENTINA CORN: 28.0 MMT; compares to 28.0 MMT in October
-- compares to 21.0 MMT for 2011-12
SOUTH AFRICA CORN: 13.5 MMT; compares to 13.5 MMT in October
-- compares to 11.5 MMT for 2011-12
BRAZIL CORN: 70.0 MMT; compares to 70.0 MMT in October
-- compares to 73.0 MMT for 2011-12
CHINA COTTON: 31.5 mil. bales; compares to 31.5 mil. bales in October
-- compares to 33.10 mil. bales for 2011-12

 

MARKET REACTION

Despite a wild reaction in prices in the first 2 minutes of trade following the release of this morning's USDA reports, corn futures are trading just slightly below unchanged, which is off a bit from levels seen just ahead of the report release. Soybean futures slumped hard in the first 3-4 minutes of trade after the reports, but have recovered to trade above session lows and are around 20 cents lower at this time. Wheat trade in Chicago was volatile in the first few minutes of trade following the report and prices continue to trade near session lows with the December contract down a dime.

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