World Production Estimates Continue to Rise...
Dec 08, 2011
· Grains lower overnight; Nearby March wheat now trading below $6, Corn traded through yesterday’s lows and is flirting with support near the lower end of Tuesday’s range
· Outside markets quiet again this morning, currencies near unch with crude slightly higher
· USDA to release December Crop Production report tomorrow morning at 7:30am CST; Trade looking for a slightly smaller corn carryout, larger soybean carryout and near unch for wheat; Full pre-report estimates on following pages
· Export Sales this morning, pre-report estimates as follows:
o Wheat 375k-625k mt
o Corn 325k-475k mt
o Soybeans 475k-700k mt
· Weekly Ethanol production for last week was pegged at 954,000bpd, up 24,000bpd from the previous week; Largest weekly number on record
· Brazil’s CONAB suggesting corn production there will be 60.3mmt, up 2.8mmt from the previous year; Corn acreage seen up 6% from last year, soybean acreage near flat
Grain and oilseed production estimates from around the world continue to rise this morning. The US grain markets are certainly vulnerable to additional downside tomorrow if the USDA follows this trend. As we saw in 2008, high prices will stimulate massive production from around the world. We’re now seeing the effects of that $7+ corn, $14+soybeans and $8+ wheat we saw over the summer. The balance sheets in the US are still very tight, and even a minor increase in demand for corn in particular could change price action drastically.
Straits Financial provides futures/options brokerage to farms, feedlots, elevators and processors. Call Joe Vaclavik for more information at (312) 462-4438.