The USDA report on corn this morning turned out to be relatively uneventful as the end effect was to reduce ending stocks for this year by 125 mbu with next year ending stocks down 200 mbu. These were despite a bullish June 30 Stocks and acreage report where acres were 1.4 million below trade estimates and June 1 grain stocks were 300 mbu below expectations. Corn production for this year is estimated at 13.245 billion bushels using a 163.5 bpa yield estimate. The only major change on demand for the 2010 crop year was a 50 mbu reduction in exports to 1.95 billion, equal to the current year. Feed usage for the 2009 crop year was increased 175 while use for ethanol saw a surprising reduction of 50 mbu. Early calls as of 8:00 seems to be 3 - 10 lower for the corn market.
The soybean report didn't really didn't do much as carryout levels were largely left unchanged with production up 35 mbu for 2010 to account for the increased acres reported June 30 with an increase in both crush and exports to leave expected Sept. 1 2011 carryout at 360 mbu. World soybean numbers don't seem to have a significant impact at this point. The soybean market is expected to be a follower today, early calls are 10 - 20 lower.
If we trade higher it’ll be because of weather concerns and outside markets, not today's report. Most commodities traded and closed already over 100 day moving averages and that could stimulate more short covering by trend following funds as they’re modestly short corn and beans. If they want to push a long we’ll end up higher today.
Phil
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