In its first look at 2010 production and use, USDA provided a lot of information for traders to mull over, but most will take it with a grain of salt, knowing that both acreage and yields may change in the course of the growing season.
Good news for corn included the fact that USDA didn't find more in the Dakotas and that it did raise world use 2%, as well as U.S. exports (200 million bushels) and ethanol use (300 million bushels), leaving carryout below 2 billion, reports Jerry Gulke of the Gulke Group. "Soybean carryover was unchanged, which is neutral to bearish, as the trade wanted to see it reduced.”
With this report, reasons for volatility have fallen, Gulke says. "That means the cost of puts and calls is lower. I think we'll be in a sideways market for now—the surprise would be if one of these crops breaks out one way or the other.”
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