EHedger Afternoon Grain Commentary 11-9-11

Published on: 15:06PM Nov 09, 2011

Grains finished weak on negative outside markets and the November USDA Supply and Demand Report.  December corn opened sharply lower but finished down only 4 ½ cents on a two sided market trade.  January soybeans finished 19 ½ cents lower at $11.85 ½, and December wheat down 14 cents at $6.43.

The much anticipated November Supply and Demand report was rather neutral for corn and bearish for beans/wheat.  For corn they did lower their yield estimate to 146.7 bringing their total production estimate down 123 million bushels from the October report. At the same time they also lowered their feed estimate by 100 million bushels so their overall carryout was still pegged at 843 million bu which was above estimates.  We also had an increase in expected Chinese production going from 182 million MTs of corn to 184.5 million MTs of corn.

For beans we also found a reduction in average yield to 41.3 but they lowered export expectations by 50 million bu which ended up raising the US carryout guess to 195.  The world carryout estimate also was increased and part of the reason for a bearish day.

Wheat still shows a massive amount of world carryover with yet another increase in stocks.  They still did not change their feed estimates from 160 even though we feel that number could be closer to 250 when it is all said and done. 

BESIDES the USDA report we also had a major selloff in the Dow Jones and major rally in the US Dollar (bearish).  This was weighing on most commodities today and helped keep grains lower into the close despite corn’s best efforts to trade higher. 

Tomorrow morning we have export sales out at 7:30 am.  I will have those posted in the morning letter.  Please call in if you have any questions.

Estimates for Export Sales

Corn                                                     550,000 – 750,000 MTs

Soybeans                                              400,000 – 600,000 MTs

Wheat                                                  350,000 – 450,000 MTs

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