December 10, 2013
Today's December USDA report pegged the U.S. ending stocks for corn at 1.792 billion bushels; wheat at 575 million bushels and soybeans at 150 million bushels. There were no U.S. grain or soybean production changes in today's USDA report. The next monthly report will be released on January 10, 2014.
With the December USDA report now behind the trade will focus on end of the year trading, the South America weather and growing conditions and then the January USDA report.
Reports to watch this week: Wednesday at 9:30 am is the weekly Ethanol production report; Thursday at 7:30 am is the weekly export sales and Friday is the expiration of the December futures grain and soybean product contracts.
U.S. House Speaker John Boehner stated last week that the House should extend the current farm bill while negotiators seek a compromise. Today Senate Majority Leader Harry Reid he will not extend the current farm law if Congress cannot agree on a new farm bill before adjourning next week.
Corn futures closed negative today after starting the session with upside and then turning negative after the USDA report was released late this morning. The good news for the corn was their ability to bounce well off the session lows.
This morning the USDA adjusted the U.S. corn ending stocks lower to 1.792 billion bushels this is 95 million bushels below the November estimate and 79 million bushels below the trade's average estimate. The USDA increased corn imports by 5 million bushels; increased ethanol use by 50 million and corn exports by 50 million.
There was no reflection today by the USDA on cutting the corn export sales due to the latest holding and rejecting of U.S. corn exports to China due to the MIR 162 trait.
The world ending stocks today were estimated at 162.5 million metric tons and decrease of 1.83 million metric tons from the November report.
There are rumors floating around that China will begin test imported DDG's from the U.S. for the MIR162 trait, like they have been for corn. This rumor has yet to be confirmed, but it does have merit to it.
The March corn futures today traded mixed on an outside trading session to the downside and a negative close. Today's high was the highest of the past 17 sessions. Resistance is at $4.40 ¾ the December high, then $4.41 the 50-day moving average, then $4.49 ½ the November high, then $4.50 psychological area, then $4.61 the 100-day moving average. Support is $4.25 area, then $4.18 ½ contract and December low and then the $4.10 area.
Soybean and soybean meal futures today saw new current highs made before the release of the monthly USDA report. The report did not seem to have enough bullishness to continue to push the soybean and meal higher after the release as they closed negative.
The U.S. soybean ending stocks came in at 150 million bushels in today's USDA report, which is 20 million bushels lower than the November report and 3 million bushels below the trade's average estimate. The imports were increased over last month by 10 million bushels, while the domestic crush was increased by 5 million bushels and the exports increased by 50 million bushels.
The world soybean ending stocks were pegged at 70.6 million metric tons an increase of 37,000 metric tons from the November report. The Brazil soybean production was left unchanged at 88 million metric tons, while Argentina was increased by 1 million metric tons to 54.5 million metric tons.
Today CONAB (Brazil's equivalent to the USDA) raised their Brazil soybean production estimate to 90.03 million metric tons
Back on Friday Safras estimated the Brazilian soybean production for 2013/14 at 89.5 million metric tons. They also estimated the Brazil soybean planting at 93% complete the average for this time of year is 91%.
January soybeans today traded mixed by having it highest trade of the past 57 sessions and then trading and closing negative. Resistance is at the $13.50 psychological area, then at $13.53 ½ December high then $13.74 to $13.78 ½ open chart gap in September, then $14.06 the 2013 high. Support starts at $13.25 area, then $13.11 ¼ the December low, then $13.00 psychological area, then $12.94 the 50 & 100-day moving averages.
Wheat futures at all three exchanges were slammed lower, made new contract lows and closed negative today with quite a few triple-digit loses. Wheat futures started going lower in the overnight trade on news that CONAB had raised the Brazil wheat production over November by 11% to 5.36 million metric tons.
The USDA this morning estimated the U.S. wheat ending stocks at 575 million bushels this is 10 million bushels above the November report and 35 million bushels higher than the trade's average estimate. The only change in the balance table for the wheat was an increase of 10 million bushels on imports.
This afternoon we are hearing that Egypt will be tendering for wheat.
There has been talk of winter wheat kill due to the extreme cold temperatures and a lack of significant snow cover in parts of wheat country. So far this talk has done very little to generate buying. Winter kill is something that the trade loves to bring up, but very little wheat is usually subject to winter kill. Winter kill is more apt to occur if the plants are already under stress and soil conditions are extra dry.
The KC March wheat futures today were slammed into a new contract low and closed negative. Resistance is at $7.00 area, then $7.20 the 100-day moving average, then $7.28 the 50-day moving average. Support is at $6.79 ¼ the contract and December low and then the $6.70 area.
Chicago March wheat today scored a new contract low and closed negative. Resistance starts at $6.50 area, then $6.72 the 100-day moving average, then $6.77 the 50-day moving average. Support is at $6.35 the contract and December low and then the $6.25 area.
The Minneapolis March wheat continued its streak of new contract low and negative close today. New contract lows have been made in seven of the past ten sessions, which includes the past five sessions. Resistance is at $6.85 area, then $7.11 ½ the December high, then $7.30 the 50-day moving average. Support begins at $6.66 ¼ the contract and December low, then $6.63 on the weekly chart, then $6.50 area.
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