USDA Reports Bearish Wheat, Corn & Beans


by Linda H. Smith, DTN Markets Editor

WASHINGTON (DTN) — USDA tweaked many of the numbers released today, some offsetting each other. Possible surprises include USDA’s increase in 2011 corn and soybean yields and production — the trade expected reductions.

However, in the end, U.S. ending stocks fell for corn and wheat, and rose 40 million bushels for soybeans.

“Thursday morning’s slew of numbers from USDA could be considered bearish for corn, beans and wheat,” said DTN Analyst John Sanow.


Contrary to most trade expectations (average 12.265 billion bushels), USDA raised its 2011 corn production estimate modestly to 12.358 bb from December’s 12.31 billion. At 3.056 bb, soybean production also slightly exceeded the December number (3.046 bb) and trade expectations (3.048 bb).

For the Crop Production Annual Summary:


All winter wheat acreage rose 3{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} in 2012, according to USDA, as hard red winter acreage rose 6{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}, soft red winter fell 2{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} and winter white fell 3{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}. These numbers are slightly higher than trade expectations.

For Winter Wheat Seedings:


Corn stocks on hand are 4{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} below year-ago levels; soybeans, up 4{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}; and wheat down 9{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}. Corn’s 9.642 bb, while within the range of trade expectations, is above the average of 9.391. Soybeans, at 2.366 bb, also are within the range at just 40 mb over the average trade estimate of 2.324. Wheat, at 1.656 bb, is 39 mb below the average trade guess of 1.695.

For Grain Stocks:


U.S. corn ending stocks tightened modestly on higher exports. Wheat ending stocks also tightened slightly, despite reductions in expected domestic use because projected exports rose more. Soybean stocks, on the other hand, rose 45 million bushels on lower crush and exports.

In its world production estimates, USDA lowered South American corn and bean production, trimming Brazil’s soybeans by 1 million metric tons and Argentina’s by 500,000 mt. Argentina’s corn was reduced 3 mmt. Wheat production in the Former Soviet Union was increased from 112.5 to 114 mmt.

However, world ending stocks of corn rose a million metric tons; soybeans fell a million and wheat rose 1.5 million from December estimates.

USDA now pegs the season-average national cash price for corn at $6.20, down from $6.40 in December; wheat, $7.20, down from $7.30 and soybeans unchanged at $11.70.

For World Agricultural Supply and Demand Estimates (WASDE):


“Corn could pull the other grains lower as both global and domestic ending stocks, crop production and quarterly stocks all came in well above expectations,” Sanow said. “However, ending stocks to use on the domestic side (6.7{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}) and global (14.8{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}) remain at the second tightest levels since 1995-1996 and 1973-1974 respectively, meaning long-term fundamentals remain bullish.

“Domestic numbers in soybeans were bearish, and ending stocks jumped to 275 mb, putting stocks-to-use at a more comfortable 9.1{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f},” Sanow said. “As for wheat, ending stocks fell slightly; however, a stocks-to-use ratio of 41.2{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} remains cumbersome. In addition, winter wheat acreage came in above expectations at 41.947 million acres.”

The global numbers were neutral for beans and bearish for wheat and corn, Sanow said.

“Traders were expecting a large drop in corn; instead, stocks rose by 1 mmt from the December number. This was largely due to the unexpected jump in U.S. stocks. Wheat also rose from the December number, keeping global supplies at a burdensome figure. Beans were the only market to see a drop in supplies as a drop in world production offset a small drop in demand,” Sanow said.

Editor’s note: Join DTN Senior Analyst Darin Newsom at 8:30 a.m. CST on Thursday for a discussion of the latest USDA reports and what the numbers might mean for the markets going forward. Sign up now at:


© Copyright 2012 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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