USDA Report Results, 6-30-08

*USDA Acreage and Quarterly Stocks data released this morning:
Acreage>
Corn= 87.327, vs estimates of 85.676 avg, range= 83.5-87.399, March USDA= 86.014, 2007= 93.6
***Harvested acreage= 78.94 mil, vs 78.8 in last USDA report.
Soybeans= 74.533, vs 74.360 avg, range= 72.0-76.0, March USDA= 74.793, 2007= 63.631
***Harvested acreage= 72.1, vs 73.8 in last USDA report.
Spring Wheat= 14.197, vs 14.321 avg, range= 14.083-14.5, March USDA= 14.333, 2007= 13.297
All Wheat= 63.457, vs 63.818 avg, range= 63.530-64.000, March USDA= 63.803, 2007= 60.433

Stocks>
Corn= 4.028, vs 3.925 avg, range= 3.550-4.326, 2007 June 1 Stocks= 3.533
Soybeans= 676, vs 669 avg, range= 615-743, 2007 June 1 Stocks= 1.092
Wheat= 306, vs 278 avg, range= 247-461, 2007 June 1 Stocks= 456

*Reaction:
Traders are quite surprised at the overall "finding" of acreage. Corn acreage was the most suprise. Even the projected "harvested" corn acreage was higher than the March intentions and after this spring's problems. While there will be non-believers, some longs will see this as a fundamental reason to add to the already existing technical warnings to exit some positions. USDA's wording today also seem to imply they have factored in much of the impact of the floods and while a more detailed assessment will occur later, some will be concerned that future revisions will not provide the new bullish input that some had hoped for. Again, the reactions may be to liquidate some long positions.

Soybeans could be a different story. Traders will view today's harvested soybean acreage projection as bullish. Soybeans may not want to fully embrace the initial "bearish" reaction to this morning's figures.

Sunday Night Grain Outlook, 6-29-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, June 29, 2008

OPENING CALL:
Corn= steady-better,     Wheat= steady-better,     Soybeans= steady-better.

Weather during the weather was in line with expectations. If anything, maybe it was a bit less than moisture than expected. For the vast majority of acres, recent/current and two-week weather expectations remain quite favorable. Most reports from the country report favorable and improving crop conditions.    

News>
*USDA Acreage and Quarterly Stocks data will be released tomorrow morning. Here are the trade estimates:
Acreage>
Corn= 85.676 avg, range= 83.5-87.399, March USDA= 86.014, 2007= 93.6
Soybeans= 74.360 avg, range= 72.0-76.0, March USDA= 74.793, 2007= 63.631
Spring Wheat= 14.321 avg, range= 14.083-14.5, March USDA= 14.333, 2007= 13.297
All Wheat= 63.818 avg, range= 63.530-64.000, March USDA= 63.803, 2007= 60.433

Stocks>
Corn= 3.925 avg, range= 3.550-4.326, 2007 June 1 Stocks= 3.533
Soybeans= 669 avg, range= 615-743, 2007 June 1 Stocks= 1.092
Wheat= 278 avg, range= 247-461, 2007 June 1 Stocks= 456.

Wheat will start higher on less than expected deliveries and amid ideas Friday’s late dump was overdone. Pre-report positioning should limit selling interest tonight.    

Corn may see trade on both sides. This writer sees weather as favorable; however, who knows how the prevailing trade spin on weather will unfold tonight. There has been a tendency during the last several months for overnight trade just before a major USDA report to be “up”, especially when traders are near universally expecting bullish data. Consequently, it seems that we must expect limited ability for weakness tonight. 

Soybeans may also see trade on both sides, but most likely there will be little interest in trading the short side in front of tomorrow’s reports.         

In summary, weather and crop conditions remain very debatable topics. Pre-report positioning isn’t likely to produce much selling pressures tonight. Most likely we will tend to have a firmer tone most of tonight.    

This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.

Sunday Night Grain Outlook, 6-22-08

Sunday Night Grain Outlook, 6-15-08

Sunday Night Grain Outlook
By Duane Lowry
Sunday, June 15, 2008

OPENING CALL:
Corn= mixed,     Wheat= mixed,     Soybeans= mixed.

Weather is similar to Friday’s expectations. Most of the Midwest will be mostly dry during the next two weeks, with any precip systems producing relatively light rain totals. It would appear that the heavy rain pattern has ended.    

News> ADM says they have closed their Cedar Rapids, IA ethanol plant because of local water use constraints due to flooding. Stock company analysts say average US ethanol producers are now losing 10 cents of more per gallon of ethanol distilled, vs a positive profit margin 2 weeks ago. Ethanol stocks have taken a beating and some stocks have been downgraded to “sell” in recent stock circle publications. Saudi Arabia plans to increase crude oil production.

Wheat will look first to row-crop market reactions for its initial price direction. Wheat weather during the next two weeks should be mostly favorable for advancing wheat harvest. Without the influence of dramatic corn strength and fear, wheat would seem quite capable of notable price weakening trends reasserting some energy.    

Corn will find mixed spins. Concerns will remain regarding acreage losses and lost production potential due to excessive moisture stresses of the past few weeks. However, it would seem that the emotion levels should ease and not be able to match last week’s efforts. Traders will expect Monday afternoon’s crop condition reports to be in the 50% Good & Excellent category, down from 60% last week. At some point it would seem reasonable to consider much of the fears have been factored into current values. The ethanol industry continues to suffer from negative margins and it seems quite feasible that old-crop corn demand for the ethanol industry needs to be shaved back by a decent amount. Projections for the next marketing year are also being scaled back. Some traders are talking about sharply higher values again tonight…I don’t see the merit in such predictions, but who knows in the current environment of feed-on-itself fear and market momentum. 

Soybeans will continue to struggle to determine lost acreage that will never be planted, vs much-delayed plantings and likely yield reductions. Here too, what price does it take to factor in current conditions? Argentine farmer/government tensions seem to have increased during the weekend.       

In summary, it appears most are willing to call markets higher tonight, with some expecting sharply higher values. I don’t see the emotion and energy redeveloping this week. Any strength tonight should lack sustainability as the week evolves.  

This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.

USDA Report data, 6-10-08

**USDA Monthly Supply & Demand/Crop Production data released at 7:30 this morning:
2007-08 Carryout Estimates>
Corn= 1.433, vs estimates of 1.424 bil avg, range= 1.378-1.583, May USDA= 1.383, 2006-07= 1.304
Soybeans= 125, vs 134 mil avg, range= 101-145, May USDA= 145, 2006-07= 574
Wheat= 254, vs 241 mil avg, range= 219-256, May USDA= 239

2008-09 Carryout Estimates>
Corn= 673, vs estimates of 736 mil avg, range= 615-850, May USDA= 763
Soybeans= 175, vs 180 avg, range= 141-285, May USDA= 185
Wheat= 487, vs 496 avg, range= 336-580, May USDA= 483

2008 Wheat Production Estimates>
All Winter= 1.817, vs estimates of 1.813 bil avg, range= 1.774-1.850, May USDA= 1.778, 2007 production= 1.516
Hard Red= 1.030, vs estimates of 1.038 bil avg, range= 1.000-1.073, May= 1.011, 2007=962
Soft Red= 571.6, vs estimates of 562 avg, range= 550-605, May= 551, 2007= 358
White Winter= 216.2, vs estimates of 213 mil avg, range= 190-228, May= 215, 2007=197

World Wheat stocks= 132.1 mmt, vs 124 in May
World Corn stocks= 103.3 mmt, vs 99.0 in May
World Soybean stocks= 50.41 mmt, vs 49.26 in May

*USDA lowered US corn yield estimates 5 bpa to 148.9. Global figures are neutral/bearish for all markets.

Calls will be higher, led by corn.