SOYBEANS
The USDA Crop Production and Supply/Demand Report this morning was considered neutral to slightly supportive for the soybean complex with the market called steady to slightly higher on the open. The USDA pegged the 2009/10 soybean yield at 42.3 bushels per acre versus 41.7 last month and trade expectations near 42.3. US production was pegged at 3.245 billion bushels as compared with trade expectations near 3.25 billion and last months USDA estimate at 3.199 billion. US ending stocks for the 2009/2010 season were pegged at 220 million bushels as compared with last months estimate of 210 million bushels and trade expectations near 225 million. Old crop ending stocks were at 110 million which was unchanged from last month and up from expectations but is still the lowest since 1976/77. The USDA raised demand numbers for new crop with crush up 20 million bushels to 1.69 billion and exports up 15 million bushels to 1.28 billion bushels. The USDA raised China import demand slightly. World ending stocks were pegged at 50.53 million tonnes compared to 50.32 in August and 51.83 in July.
PRICE OUTLOOK: A lack of bearish news on the supply front and an adjustment higher in both export and crush demand is supportive. Close-in support for November soybeans is 925 3/4 with 951 1/4 as first good resistance.
CORN
The USDA Supply/Demand report was considered slightly supportive for corn with the market called 2 cents higher. The USDA pegged 2009/10 US corn yield at 161.9 bushels per acre versus 159.5 bushels per acre on the August report. Traders were looking for a yield number near 161.4. Total production was pegged at 12.955 billion bushels compared to 12.761 billion bushels in August and right on the trade estimates ahead of the report. Corn ending stocks for 2009/10 were pegged at 1.635 billion bushels compared to last month’s estimate of 1.621 billion and trade expectations near 1.77 billion bushels. While supply was about as expected, the USDA raised feed usage by 50 million bushels and exports by 100 million bushels. This pushed total usage to 13.025 billion bushels from 12.045 billion last year and 12.737 billion two years ago. World ending stocks were pegged at 139.1 million tonnes from 141.5 million last month and 144.7 million last year.
PRICE OUTLOOK: The report offered no new surprises from a supply perspective but the jump in demand helped hold ending stocks well under trade expectations to help support. The market is operating under the positive influence of the September 8th reversal and the report may support a bounce to 330 1/4 with close-in support at 312 for December corn.
WHEAT
The USDA’s August Supply/Demand and World Production reports were considered neutral to positive for wheat with the opening call steady to 3 cents higher. US numbers were all left unchanged from the August Supply/Demand, including the spring wheat number. Ending stocks for all wheat were left unchanged at 743 million bushels as compared with trade expectations for a jump of near 30 million bushels. Spring wheat production was unchanged at 511 million bushels. In contrast to the unchanged US numbers, world wheat production was increased to 663.72 million tonnes versus 659.29 in August. World ending stocks were increased by a similar amount to 186.61 million tonnes versus 183.56 last month. Australia, Argentina and Canada wheat production numbers were all left unchanged, while the EU-27 was raised by over 2 million tonnes to account for most of the gain in ending stocks.
PRICE OUTLOOK: Traders have been focusing on increased world wheat supplies rather than the US spring wheat crop in recent days and today’s report confirmed the market’s concerns over the world supply. While the wheat market could see a bounce after today’s report, this is likely to be a selling opportunity unless the lower dollar brings a substantial and fairly immediate increase in export demand.
