Bearish WASDE Report Leaves Markets Snoozing

December 10, 2011 06:25 AM
Bearish WASDE Report Leaves Markets Snoozing
Grain prices were pretty much even this week and analysts were waiting for Friday’s December Supply & Demand reports to provide market-moving news. But, overall it was pretty quiet.
“I think for the most part this report didn’t tell us anything we didn’t know,” says Jerry Gulke, president of the Gulke Group.

Here are highlights from the report:

Corn: USDA raised its corn carryover projection 5 million bushels from last November. On usage, USDA cut 5 million bu. from projected food, seed and industrial use, to 6.405 billion bushels.
USDA now projects a national average on-farm cash price of $5.90 to $6.90 -- down 30 cents on both ends of the range from last month.
Soybeans: USDA increased its 2011-12 soybean carryover projection by 35 million bushels from last month, and cut 25 million bushels from projected exports, which now stand at 1.30 billion bushels. USDA also cut 10 million bushels from projected crush, to 1.625 billion bushels.
A national average on-farm cash price of $10.70 to $12.70 -- down 90 cents on both ends of the range from November, was projected by USDA.
Wheat: USDA increased its wheat carryover forecast by 50 million bushels from last November, and is now seen at 925 million bushels. USDA now projects an average on-farm cash price of $7.05 to $7.55, steady on the bottom end of the range and down 20 cents on the top end.
Listen to Gulke's audio analysis:
Gulke says the raise in corn carryout is an insignificant amount. But, it did cause the corn markets to be lower at Friday’s close, yet still above $5.80. “All in all it was a do-nothing week for corn.”
The surprise was in soybeans. “We knew exports were going to fall, so it wasn’t really a surprise,” he says. “It was the biggest negative news.”

Market Waiting for January

Gulke says now the market will turn it’s attend to the next major USDA report, which will come out on Jan. 12. “They’ll have a better handle of it by then,” he says. “I suspect that one will show more corn usage than what we have in there now.”
He says that even though today was a ho-hum USDA report, continue watching market factors and be prepared for Jan. 12. “That report has the tendency to be a market-mover.”
Listen to Gulke’s full audio analysis.

For More Information
See this week's market summary report: Wheat Remains Steady Despite Negative Report

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Spell Check

12/10/2011 02:46 AM

  God bless the USDA - the Grinch that stole Christmas from grain farm producers in the US and gave yet another Chinese New Year's Gift to the Asian buyers of our corn. You can always count on them when the going gets tough to totally capsize our corn marketing efforts. Not enough to deal with MF Global's fraud or the Eurozone collapse but we have the singular pleasure of a Government gone amuk to really tank the market. Congratulations, USDA - play footloose with corn sweetener figures to make it all work. A very large lump of coal in your stocking!!! My grain is in the bin maybe until the next election or at least until the next Ag Secretary. FFA - what FFA?? Just trips to the golf courses and junkets to Asia. Insults to our trading partners and indifference to our exports. November will be our next Christmas and we can wait.

12/10/2011 02:50 AM

  Thirty cents a bushel is what the farmers pay for stupidity and political maneuvering at the USDA. That's $30,000 for every 100,000 bushels. Meanwhile who sees the destruction of demand here in the USA? Exports are down but local basis is HIGH. Is the USDA irrelevant? No, but it should be.

12/10/2011 02:52 AM

  Let's eliminate the USDA and give the money to the Postal Service. At least I get something for my stamp.​


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