March corn closed sharply higher Friday after the USDA report left corn carryout unchanged from the Feb report. March beans closed slightly lower and March wheat slightly higher.
The Supply and Demand report didn’t provide any monumental changes. Although corn carryout was left untouched at 632 million bushels it was still slightly less than the average analyst estimate of 650 million which helped support the front month contracts. They reduced corn exports by 75 million bushels, raised imports by 25 million bushels and raised feed use by 100 million. Wheat carryout was higher than expected at 716 million after the USDA lowered export demand by 25 million. Soybean carryout was left unchanged in the US at 125 million bushels.
The USDA made minimal changes to their South American projections as well. They have Argentine soybean production at 51.5 (down 1.5) and Argentine corn production at 26.5 (down 0.5). Brazilian bean production was estimated at 83.5 (unchanged) and their corn production was 72.5 (unchanged). The main divergence from market expectations was that the USDA was more conservative on lowering Argentine production than the private estimates continue to roll in at.
The bottom line is this report wasn’t a major game-changer for grains but we do have some major reports on the horizon that might be. On Thursday, March 28th we will have the Quarterly Stocks Report as well as the Planting Intensions report. The corn-to-soybean ratio has been slowly trending higher since the beginning of the year which could mean soybeans get more acres than early estimates were calling for. Today we had a major shift back in favor of corn planting with December corn closing 5 ¼ cents higher and November soybeans 9 ½ cents lower.
Corn-Soybean Ratio 2013
We bumped up our hedge recommendations yesterday with the Short-Dated New Crop options for corn and soybeans. We are still long term bearish (new crop) due to the large South American crop expected as well as the potential for large 2013 US acreage. Please contact us with any questions or to review your current marketing plan in our proprietary farm management marketing software - AgYield.
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