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Neutral report, a yawner

first_imgShare Facebook Twitter Google + LinkedIn Pinterest Today’s USDA crop report looks to be dismissed and nearly soon forgotten if you believe the news stories prior to the noon release. Grains overnight were mixed with corn and wheat lower while soybeans were higher. The report today deals solely with the supply and demand report. Production numbers for 2015 will not be changed. Usage and ending stocks will be the numbers that the market, analysts, and producers will key on.U.S. corn and wheat ending stocks were unchanged, no big surprise. Corn exports were unchanged, no big surprise. Soybean ending stocks went up 10 million bushels to 460 million bushels due to crush lowered by the same amount. This had been well expected by the trade.Prior to the report corn was down 3 cents, soybeans up 3 cents, wheat down 3 cents. Shortly after the report release, corn was down 1 cent, soybeans down 3 cents, while wheat was down 1 cent.Overall, few changes were made with this USDA report. Corn and soybean production were unchanged in both Brazil and Argentina. Tomorrow CONFAB will release crop production estimates in Brazil. USDA did increase soybean imports into China by 1.5 million tons, now estimated to reach 82 million tons. They were very minor changes in world ending grain stocks. Nothing is glaring or out of line with those numbers.Many suggested corn exports could be unchanged this month due to the decline last month of 50 million bushels. The average trade estimate has corn ending stocks at 1.860 billion bushels. Last month they were 1.837 billion bushels. Corn export loadings from Monday were above the high end of expectations at 37.5 million bushels. It is no surprise that US corn exports to date are running behind those of a year ago due to stiff overseas competition. Corn exports to date are 159 million bushels below those of a year ago for a 20% decline. Currency devaluations in both Brazil and Argentina have helped increase their corn exports as the US continues to lose ground. Corn futures are oversold, that is offering some support along with the strong eastern U.S. corn basis. Ethanol plants in southwest and western Ohio are bidding anywhere from May plus 22 to plus 32 on posted bids. Forecasts of heavy rain in the Delta and south central Midwest that would delay planting has also been supportive. Some corn has been moving on rallies. However, there is still a lot of corn in farmers’ bins with planting less than a month away across Ohio. Fieldwork is already underway in central Illinois with anhydrous ammonia applications taking place this week. If expected rains on Thursday are light, Ohio as well will soon see the anhydrous applicators dotting the landscape.Soybean ending stocks were expected to also increase with trade estimates at 457 million bushels compared to last month at 450 million bushels. An expected decrease in soybean crush brings on the thought of higher ending stocks. Soybean harvest is well underway in Brazil as harvest is approaching the 50% completion level. Yesterday soybeans were initially lower on increased US farmer selling. Additional selling pressure failed to materialize with soybean closing 2.75 cents higher on Monday. U.S. soybean exports from Monday were 39.2 million bushels. Year to date U.S. soybean exports are 110 million bushels behind those of a year ago, a 7% decline. Two events in Brazil were supportive on Monday. Rains in central Brazil along with a potential truck strike limited selling that had sellers without strong conviction. May CBOT soybeans are in a range of $8.50-9.00. Sellers lost control last week when they could not keep prices moving lower all week. They were unable to take out the January low of $8.56 on the May CBOT contract. That price was matched last week but that is all. The lost momentum by sellers last week is similar to pushing a huge boulder up hill. If you look over your shoulder to measure progress, you soon find yourself flat on the ground, smashed and hurting as the boulder rolls downhill below you, getting smaller by the second. The commitment of traders’ report that is released each Friday after the grains are closed, revealed fund traders were shorter grains than had been expected. That was a surprise to the market on Monday.This report has been dismissed even quicker than normal. The market attention quickly returns to focus on weather both in the US and South America. In coming weeks, weather reports, farmer movement of stored grain, and planting activity will dominate the U.S. grain news.last_img

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