PF Special -- Reaction to USDA December Reports

December 10, 2013 05:37 AM


Ahead of today's Crop Production and Supply & Demand Reports, March corn futures were trading near unchanged, January soybean futures were around 6 cents higher, March SRW wheat was around 7 cents lower and March cotton was around 20 points higher.

After pushing higher immediately following the report release, corn and soybean futures are now under light pressure. March corn futures are trading around 4 cents lower and January soybeans are around a penny lower. March SRW wheat futures have extended losses to around 12 cents. March cotton futures are holding at roughly the same price they were ahead of USDA's report release.


COTTON: 13.07 million bales; trade expected 13.2 million bales
-- compares to Nov. est. of 13.10 million bales; 17.315 million bales in 2012

USDA made no change to its cotton harvested acreage estimate. The national average cotton yield was lowered by 2 lbs. per acre from last month to 806 pounds. That lowered the production estimate by 36,000 bales from last month. USDA estimates record cotton yields in Arizona, Louisiana, Arkansas and Mississippi.

2013-14 U.S. CARRYOVER

CORN: 1.792 billion bu.; down from Nov. proj. of 1.887 billion bu.
-- compares to 824 million bu. in 2012-13
BEANS: 150 million bu.; down from Nov. proj. of 170 million bu.
-- compares to 141 million bu. in 2012-13
WHEAT: 575 million bu.; up from Nov. proj. of 565 million bu.
-- compares to 718 million bu. in 2012-13
COTTON: 3.0 million bales; unch from Nov. proj. of 3.0 million bales
-- compares to 3.9 million bales in 2012-13

USDA increased its 2013-14 corn import forecast by 5 million bu. to 30 million bushels. That was on the only change on the supply side of the balance sheet, as USDA does not issue an updated corn crop estimate in December. On the demand side, USDA upped food, seed and industrial use by 50 million bu. (to 6.4 billion bu.), with all of that increase coming in projected corn-for-ethanol grind (to 4.95 billion bu.). USDA also increased projected exports by 50 million bushels (to 1.45 billion bu.). USDA now forecasts the season average on-farm cash price at $4.05 to $4.75, down a nickel on the bottom end of the range and down 15 cents on the top end.

For soybeans, USDA increased its import forecast by 10 million bu. (to 25 million bu.), which was on the only change on the supply side of the balance sheet. On the usage side, USDA increased projected crush by 5 million bu. (to 1.69 billion bu.) and projected exports by 25 million bushels (to 1.475 billion bu.). The result is a 20-million-bu. cut to projected ending stocks for 2013-14. USDA now forecasts the season average on-farm cash price at $11.50 to $13.50, up 35 cents on both ends of the range from last month.

USDA increased projected 2013-14 wheat imports by 10 million bu. from last month (to 160 million bu.) and made no changes to the demand side of the balance sheet. That results in a 10-million-bu. increase to carryover from last month. USDA now forecasts the season average on-farm cash wheat price at $6.65 to $7.15, down a nickel on the bottom end of the range and down 15 cents on the top end from last month.

USDA lowered its total cotton supply forecast by 40,000 bales from last month due to the smaller crop estimate. The only change on the demand side of the balance sheet was a 40,000-bale decrease to unaccounted "use" (to -20,000 bales). That results in the carryover projection holding steady with last month's forecast. USDA now forecasts the season average on-farm cash cotton price at 70 cents to 78 cents, up a penny on the bottom end of the range and down a penny on the top end from last month.


CORN: 162.46 MMT; down from Nov. proj. of 164.33 MMT
-- 134.9 MMT for 2012-13
BEANS: 70.62 MMT; up from Nov. proj. of 70.23 MMT
-- 60.18 MMT for 2012-13
WHEAT: 182.78 MMT; up from Nov. proj. of 178.48 MMT
-- 175.83 MMT for 2012-13
COTTON: 96.41 mil. bales; up from Nov. proj. of 95.71 mil. bales
-- 89.14 MMT for 2012-13


ARGENTINA BEANS: 54.5 MMT; compares to 53.5 MMT in November
-- 49.3 MMT for 2012-13
BRAZIL BEANS: 88.0 MMT; compares to 88.0 MMT in November
-- 82.0 MMT for 2012-13
ARGENTINA WHEAT: 11.0 MMT; compares to 11.0 MMT in November
-- 9.5 MMT for 2012-13
AUSTRALIA WHEAT: 26.5 MMT; compares to 25.5 MMT in November
-- 22.46 MMT for 2012-13
CHINA WHEAT: 121.0 MMT; compares to 121.0 MMT in November
-- 121.0 MMT for 2012-13
CANADA WHEAT: 37.5 MMT; compares to 33.2 MMT in November
-- 27.21 MMT for 2012-13
EU WHEAT: 143.12 MMT; compares to 143.34 MMT in November
-- 133.88 MMT for 2012-13
RUSSIA WHEAT: 51.5 MMT; compares to 51.5 MMT in November
-- 37.72 MMT for 2012-13
FSU-12 WHEAT: 104.06 MMT; compares to 104.06 MMT in November
-- 77.21 MMT for 2012-13
CHINA CORN: 211.0 MMT; compares to 211.0 MMT in November
-- 205.6 MMT for 2012-13
ARGENTINA CORN: 26.0 MMT; compares to 26.0 MMT in November
-- 26.5 MMT for 2012-13
SOUTH AFRICA CORN: 13.0 MMT; compares to 13.0 MMT in November
-- 12.37 MMT for 2012-13
BRAZIL CORN: 70.0 MMT; compares to 70.0 MMT in November
-- 81.0 MMT for 2012-13
CHINA COTTON: 32.0 mil. bales; compares to 32.5 mil. bales in November
-- 35.0 MMT for 2012-13

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