What Traders are Talking About:
* USDA unexpectedly raises soybean production, carryover figures. Soybean traders had a sharp negative reaction to USDA's Crop Production and Supply & Demand Reports Monday morning. USDA's soybean production estimate at 3.085 billion bu. and new-crop ending stocks projection at 165 million bu. came in higher than month-ago and the pre-report trade guesses. USDA's corn crop estimate at 12.497 billion bu. was in line with expectations. While the new-crop carryover projection at 672 million bu. was larger than the average trade guess, it was down from August -- and very tight. While USDA cut 400 million bu. from its 2011-12 corn usage projections, it's going to take higher prices to get those cuts.
The long and short of it: While traders feel USDA will eventually lower its soybean crop estimate, the September peg temporarily took the wind out of bulls' sails. Fundamentals remain very strong for corn.
* Euro-zone economic concerns heighten. Concern is rising Greece will default on its sovereign debt obligations, which is the primary worry in the euro-zone. But it's far from the only issue. The Wall Street Journal ran a story today quoting an anonymous executive with French bank BNP Paribas saying the bank can no longer borrow dollars. The bank is categorically denying the story. Also, yields on Italian bonds soared after an auction on 5-year bonds hit the highest level since the euro was introduced.
The long and short of it: Building macro-economic concerns creating anxiety among investors, which is weighing on global stock markets and most commodities.
* Corn, bean crop conditions stabilize. USDA reported 53% of the corn crop was rated "good" to "excellent" as of Sunday, which is up from 52% last week. USDA said 56% of the soybean crop was rated in the top two categories, which was unchanged, but there was a 1 point increase in the "excellent" category. When USDA's crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 = crop failure; 500 = perfect crop), both corn and soybeans improved 1 point to 338 and 341, respectively.
The long and short of it: Corn and soybean crop ratings stabilized, but there are still crop concerns, especially for corn.
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