USDA Raises Export Targets
Dec 11, 2013
Good Morning! Paul Georgy with early morning comments for December 11, 2013 at 5:00 am. Grain futures are higher on short covering and positive USDA demand.
The USDA increased the export demand for corn by 50 million bushels and soybeans by 25 million bushels. However the increase in ethanol demand by 50 million bushels was a surprise for the trade. Offsetting the increase in demand, the USDA raised imports of soybeans by 10 million bushels and corn by 5 million bushels. Traders already are worried about adjustments the USDA may make on the January report. Questions already being asked are: How much will USDA raise yield? What will quarterly stocks be for corn and soybeans?
USDA raised the soybean production for Argentina by 1 million which was in line with trade expectations. However they left the Brazilian production unchanged leaving room for change in January.
The next few weeks will have limited news events in the US as Congress will be on holiday and traders even up their books for year end.
Ag bill negotiators end a session yesterday that left the Republicans wanting a one month extension to the current law and the Senate Ag Chairman Stabenow saying she will let the old law expire.
US Congressional Budget negotiators reach a 2 year agreement aimed at avoiding another government shutdown.
Cash market strength has been a big part of the reason for the rally in nearby corn and soybean futures contracts. Farmers have a tendency of starting to move grain the last few weeks of December taking payment in early January. This could have a considerable impact on basis as the new year approaches.
The snow storm on the east coast has livestock traders concerned about meat demand. Cash cattle trade is now expected to develop at steady to lower prices. Beef cutout values were lower with choice down .40 and select down .11. The CME Index is 166.24.
The December futures contract goes off the board on Friday and is currently discount to the cash index. Feb futures are being tugged lower because of the premium to the current cash price. Pork cutout values were up 1.47 on Tuesday.
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Markets as of 5:00 AM
- Mar Corn +1 3/4
- Jan Beans +5 3/4
- Mar Wheat +4 1/2
- Feb Cattle +.27
- Feb Hogs +.12
- Mar Dlr +.01
- Mar S&P -1.25
- Jan Crude -.02
- Feb Gold -6.60
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