What Traders are Talking About:
* USDA trims corn crop less than expected. USDA's September corn crop estimate came in at 10.727 billion bu., down just 52 million bu. from August. Traders were anticipating a 376-million-bu. reduction based on the average, pre-report trade guess. For soybeans, USDA's September crop estimate of 2.364 was right in line with the average pre-report trade guess and down 58 million bu. from last month. USDA raised its 2011-12 and 2012-13 corn carryover forecasts from last month. While bigger old-crop corn ending stocks were expected, the estimate came in higher than the average trade guess. And the increase in projected new-crop carryover caught traders by surprise. USDA's soybean carryover forecasts of 130 million bu. for 2011-12 and 115 million bu. for 2012-13 were mostly neutral. For wheat, USDA left its 2012-13 ending stocks forecast unchanged from last month.
The long and short of it: The corn data is bearish and is drawing a negative price reaction. Soybeans are holding strong in the face of the negative corn data, while wheat is following corn lower. Now that USDA's September forecasts are known, attention will turn to end-users' response.
* FOMC meeting kicks off today. The two-day Federal Open Market Committee meeting gets underway this morning amid speculation the end result will be a third round of quantitative easing (QE3). In addition to its normal post-meeting commentary, the Fed will release updated economic forecasts and Chairman Ben Bernanke will hold his quarterly press conference. Investors are eager today and will be fully tuned in tomorrow afternoon when Bernanke is addressing the press.
The long and short of it: Anything short of a QE3 announcement would be negatively received by investors who have long been waiting for additional stimulus. But history suggests the Fed is unlikely to make a move ahead of the presidential elections on Nov. 6, so there is some potential drama.
* German court clears way for ratification of rescue fund. Germany's Constitutional Court has given the okay for the country to ratify the euro-zone's new ESM rescue fund and budget pact under the condition that futures increases would need prior approval from the Bundestag lower house of parliament. The court also ruled both of Germany's houses of parliament has the right to be consulted on the ESM's activities.
The long and short of it: This court ruling is a victory in an attempt to stabilize the euro that's being applauded by European leaders and triggering a more risk-accepting attitude among investors.
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