Vanilla report day from USDA
Share Facebook Twitter Google + LinkedIn Pinterest No major changes. Boring. No big price spikes up or declines. This comment was heard following the report, “That has to be one of the most subdued post report actions I have seen in a long time.”USDA put US corn ending stocks for 2016-17 at 2.403 billion bushels, unchanged from last month. U.S. soybean ending stocks for 2016-2017 were 480 million bushels also unchanged from last month. U.S. wheat ending stocks were also unchanged at 1.143 billion bushels. U.S. soyoil ending stocks did decline as recent biofuel announcements suggest more soyoil being used.World ending stocks for corn, soybeans, and wheat did increase, no surprise there.Brazil corn production was increased three million tons while Argentina corn production was unchanged at 36.5 million tons. Nobody should be surprised with the Brazil corn production increase.Soybean production in Brazil was estimated at 102 million tons while Argentina soybean production was pegged at 57 million tons. Both are unchanged from November.Prior to the report corn was up 1 cent, soybeans were up six cents, wheat was down two cents. At 12:20 p.m. corn, soybeans, and wheat were all down one cent.Traders were expecting little changes to today’s USDA supply and demand report. This report is a demand report for U.S. grains. There will not be any changes to the 2016 corn and soybean production numbers. USDA will report the final 2016 corn and soybean production numbers on Jan. 12, 2017. That same day USDA will detail US grain stocks as of Dec. 1, 2016. Trade estimates prior to the report had corn and soybean ending stocks changing very little. Those estimates had U.S. corn ending stocks at 2.413 billion bushels, up just 10 million bushels from November. Corn ending stock estimates ranged from 2.364-2.584 billion bushels. Trader estimates had soybean ending stocks at 470 million bushels, down 10 million bushels from November. The soybean ending stocks had a trader estimate of 428-500 million bushels.Weather has once again emerged as a dominant market feature the last two weeks. Now South America weather is capturing lots of attention. Earlier in the week on Tuesday when soybeans were up double digit gains for the first half of the day, producers were active sellers of both old and new crop soybeans. Tuesday soybeans closed up just four cents while earlier in the day they had been up as much as 18 cents. Yesterday, soybeans were down 22 cents as ideas of normal rains for Argentina the next two weeks overshadowed current dry conditions in Argentina and the southern half of Brazil. Corn continues to struggle in a 30 cent trading range, having great difficulty to hold significant daily gains. Wheat is wheat as sellers continue to emerge on higher price activity.With U.S. production numbers not changing this month, we could see the market focus more attention on world grains stocks. Traders were expecting world corn stocks to increase from November. In addition, wheat has been seeing pressure this week due to larger production expected from Canada, Argentina, and Australia.Traders are expecting Brazil soybean production to come in at 102 million tons, up from last year’s 96.5 million tons. Argentina soybean production estimates were 57 million tons, last year they produced 56.8 million tons.One emerging trend we have observed the past few months is that when soybeans are trading higher at the 8:45 am pause, they often have great difficulty closing with those same gains at the 2:20 pm settlement. That trend is even more prevalent when the 8:45 am pause has soybeans up 10 cents or higher. Some would suggest it is a very different crowd that trades grains in the night session from 8:00 pm to 8:45 am compared to the trader activity in the day session from 9:30 am to 2:20 pm.The U.S. Climate Prediction Center forecasts that La Nina will likely remain in the Pacific deep into the winter, fading away by spring. Those conditions will likely bring colder and wetter conditions in the northern U.S. That walks side by side of forecasts all fall calling for a colder than normal winter in the northern U.S. Producers had fantastic weather for harvest activity with normal to above temperatures and below normal rainfall. Today central Ohio has bone chilling temperatures when you factor in the wind. We are seeing temperatures in the teens for lows. Daily highs are struggling to reach 30 degrees easily reminds us that winter is certainly here. Brrrr!Now that the U.S. Presidential election is behind us it is most exciting to see all of the outstanding business people being appointed to cabinet positions. Granted many of those positions will need to be approved by Congress. These appointments seem to be breaking the mold of career politicians holding cabinet positions.Look for the markets to focus on weather, export activity, and what the U.S. Fed does with interest rates later this month. South America weather will keep traders and producers watching with great intensity.It is December. Enjoy all of the Christmas activity with your families!