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February 2015 Market Analysis

USDA Report & Market Highlights

  • Corn Summary – Ending stocks were reduced 50 mbu on higher ethanol grind and lower feed use. At 1.827 bbu the figure was 10 above the average trade estimate of 1.817. The Argentine crop rose 1 MMT and Ukraine, 1.45 million. Exports will be closely watched with increased competition expected from Argentina and the Ukraine.
  • Soybean Summary – U.S. stocks came in at 385, 17 below the average trade estimate with crush up 15 and exports, 20 higher. The net change to the S AM estimate was zero with Argentina up 1 and Brazil down 1. Non-PRC SBM demand appears to be for real but still looking at a huge increase in global soybean inventories.
  • Wheat Summary – Estimates were in line with expectations with the exception of world carryout for 2014/15, which was higher-than-expected and continues to confirm ample supplies. An increase of 5 million bushels in the U.S. carryout to 692 mbu reflects a 25 mbu reduction in exports that was only partially offset by a 20 mbu decrease in imports. In the absence of any major world crop concerns, momentum seems to favor the downside.

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January 2015 Market Analysis

USDA Report & Market Highlights

  • Corn Summary – When the dust cleared, slightly friendly corn report with the USDA taking 2.4 bpa/191 mbu off its yield/production estimate. C/O 121 lower at 1.877 bbu, some 63 mbu below the trade average. SON feed/residual use 190 mbu below implied trade estimate. Implied BOY feed/residual # according to the USDA is about 450 mbu ABOVE LY.
  • Soybean Summary – USDA production estimate very near the trade average; c/o holds steady at 410; WASDE more or less embraces CONAB’s bean figure (95.5 versus 95.9); world stocks to build by over 910 mbu this year if S Am production and global use estimates hold.
  • Wheat Summary – Mixed bag as Dec. 1 stocks were above expectations but new-crop winter wheat acreage was lower than expected. Dec. 1 stocks of 1.525 Bbu implied lower-than-expected feed/residual use during Sept-November, primarily HRW. No change to exports, although sales and shipments continue to lag. Carry-out for all wheat up 33 mbu, with most of that increase seen in HRW (+26 million). New-crop winter wheat seedings were light of expectations. At 29.5 million acres, HRW seedings are forecast to be down 3% or about 1.0 million acres vs. last year. The USDA also projected a 1.0 million acre decline in SRW; 7.5 vs. 8.5, or 12%. Choppy with a focus gradually shifting to new-crop prospects both here and in other Northern Hemisphere production regions (e.g. FSU and EU).

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