Walsh Commercial Hedging 4/10/12
Apr 10, 2012
Good afternoon. We saw some volatility in the grains today after the USDA came out with their monthly WASDE tables. Most market watchers expected the USDA to cut its corn carryout but instead the USDA left corn ending stocks unchanged at 801 million bushels. A drop in ending stocks in the area of 717 million bushels was expected, in part, because of strong U.S corn export sales last week and due to the lower than expected March 1st stocks report. The USDA did take the unusual step of acknowledging that early spring corn planting and abundant wheat supplies should help keep corn supplies falling to dangerously low levels this summer. The USDA stated that, “The quick start to corn plantings this spring and more intended acres across the South raise the possibility that much of this year’s crop will be harvested early, before August 31st.” May corn finished down 14 ¼ at 634 ¾ while new crop corn was down 6 ¾ for the day.
May beans finished down a nickel at 1426 and new crop beans got hit hard finishing down 17 ¼ at 1364 ¾. The beans were positive into the mid-session but outside markets turned bearish with a sharp break in the stock market and you have a record net long position in beans so long liquidation drove the beans down. World ending stocks for beans came in at just 55.52 million tonnes which is down from 57.3 million last month and down from 69.12 million last year. Brazil production came in at 66 million down from 68.5 million last month and Argentina was revised down to 45 million from 46.5 million last month. It will be interesting to see if November beans hold their support level at 1361 in the following days given the bullish bean numbers released today. All in all, all eyes will be on the weather now as tomorrow officially marks the beginning of U.S corn planting season in many regions of the Corn Belt.
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