This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Wednesday, December 10, 2014.
The USDA released its latest WASDE report this morning, the last report for the year. This report is traditionally a “throw away” as supply side to the chart is left untouched until January. Without any changes to the 2014 crop production totals, demand was in the spotlight. The results of the carryout changes are below.
The report saw slight cuts to corn and soybean carryout’s for 2015, and a small hike in all wheat supplies. The immediate price action saw selling in all three markets, but beans found a floor near the 1030 level and corn held off yesterday’s lows near 390. I think the report will be forgotten within days, especially if the export reports come out with a surprise tomorrow.
The real news of the day didn’t come from USDA, it came from the Brazilian Ag authority CONAB. They came out with their production report projecting crop size for their current growing season. The result of the report showed a surprising hike in soybean supplies on the back of higher planted acreage. CONAB projects soybean production near 95 million metric tons (3.7 billion bushels), a hike of over 5% from where they saw things last month. Last year Brazil produced just over 92 mmt (3.5 billion bushels) a record crop, just slightly smaller that what the US produced.
Bottom line, the USDA supports front month prices while CONAB is very bearish for deferred futures. I cant envision prices being at these levels next year if both US and Brazil would produce what is planned. If you are going to be soybean heavy next year, selling into the spring rally needs to be planned.
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Futures Traders’ Guide to the WASDE
Designed exclusively for futures traders, this comprehensive guide will help you understand the USDA World Agriculture Supply & Demand Estimates For Corn, Soybeans and Wheat reports.
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