Is USDA Data Close To Reality?
Aug 13, 2013
Good Morning! Paul Georgy with early morning comments for August 13, 2013 at 4:45 am. Grain futures are higher on short covering and technical buying. Yesterday’s chart reversal has provided follow-through buying in the overnight session.
USDA surprises trade by decreasing corn yields by 2 bushels per acre instead of the 1 bushel increase expected by trade analysts. Yields will likely trend higher into the final number with crop condition ratings remaining at 64% good to excellent this week compared to 58% average. Historical data also suggests 6 out of 10 similar years had final yields that were higher than the August estimate.
The lower total corn production estimate gives the USDA some wiggle room on subsequent reports. They still have to deal with the prevented planted acres in IA and MN plus a possible reduction in harvested acres.
Soybean data released yesterday brings ending stock estimates to a snug level. The USDA lowered soybeans planted and harvested by 500,000 acres. Lowering the production by 75 million bushel now makes for a market even more sensitive to rainfall the last half of August and early September. An early frost could also have a major impact on soybeans yields. Soybean crop conditions were 64% G/E, steady with last week.
Wheat data had only minor changes to exports which lowered ending stocks by 25 million bushel. China’s import of wheat was raised by 1 million tonnes.
Chart watchers are looking at the big outside day up in December corn as supportive. However many are expecting Managed Money to be sellers on rallies as the 50 day moving average is still above the 5.00 area. The close above the 12.25 in November soybeans projects a retest of the 12.50 level.
The USDA increased beef production in the July through August period by 200 million pounds on Monday’s report. There were no new deliveries but 20 were retendered making all 160 deliveries retendered. Product markets were higher on Monday as retailers prepare for the Labor Day holiday. Choice was up 1.29 and select was up .85. Seasonal patterns suggest it is likely cattle futures have seen the summer lows.
Strong seasonal patterns suggest cash hog markets could trend lower after the retail buyer has filled their needs for the upcoming holiday. Pork cutout values were down 1.57 on Monday.
Allendale’s Annual Yield survey begins on Sunday we look forward to the estimates from your farms.
Weekly Poll Results: What percent of new crop corn do you have sold?
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Markets as of 4:45 AM
- Dec Corn +3 1/2
- Nov Beans +14
- Sep Wheat +5 1/4
- Oct Cattle +1.10
- Oct Hogs +.02
- Sep Dlr +.16
- Sep S&P +5.75
- Sep Crude +.90
- Oct Gold -.60
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