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Analyst: USDA Supply, Demand Report Bearish for Corn, Mildly Bullish for Soy

13 September 2013
Jim Wyckoff Commentary -  TheCropSite

ANALYSIS - USDA's monthly supply and demand pushed Chicago corn futures to slump to a four-week low in the wake of a bearish slight rise in the US corn production figures for September, writes Jim Wyckoff for ThePoultrySite.

The government data also showed a mild reduction in the US soybean crop production forecast, which was expected but did offer slight support to the soybean futures market. Wheat futures saw selling pressure mainly due to the sharp losses in the corn futures market.

Traders expected the government to lower the US corn crop size slightly, but instead USDA raised production by 80 million bushels from August's report, to 13.843 billion bushels. The average US corn yield was raised to 155.3 bushels per acre, compared to 154.4 in August's USDA report. USDA also reduced old-crop corn carryover to 661 million bushels, which was lower than market expectations.

Soybean futures prices were given a slight boost in the wake of a neutral to mildly bullish USDA monthly crop report. The USDA trimmed the size of the US crop to 3.149 billion bushels versus 3.255 billion bushels in the August report. The average US soybean yield was pegged by USDA at 41.2 bushels per acre, versus 42.6 in August. USDA left its 2012-13 soybean carryover level at a tight 125 million bushels.

December soft red winter wheat futures prices were lower at midday Thursday and hovering near the contract low of $6.35 1/2 a bushel scored in August, following the USDA report. Wheat continues to be a follower of corn and soybeans. USDA left its all US wheat crop carryout estimate unchanged at 718 million bushels.

ThePoultrySite News Desk

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

Top image via Shutterstock

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