The corn market Friday was the beneficiary of yet another USDA report that wasn’t quite what the majority of analysts expected. It was a good day in the markets to close out another rocky week, and the move followed the government’s quarterly Grain Stocks report. The corn figure came in 193 million bushels under the WASDE projection of just 16 days earlier, and as analyst Logan Burgess of Grain Hedge explained, it was then off to the races.
“We did have corn stocks come in below the one billion bushel mark at 988 million and I think that one billion is kind of psychological number that people were watching. It was about 10 percent below market expectations.”
The wheat market got a bullish report too. The average trade guess for wheat stocks was 2.281 billion bushels but USDA came in under that at 2.103. Soybeans also traded higher, getting a boost from the corn and wheat markets despite stocks at 169 million bushels, larger than analyst estimates.
“The trade was expecting about 131 million bushels so accordingly beans are kind of lagging behind corn and wheat right,” Burgess said at midday of Friday’s trade. “Actually soybeans were kind of an unchanged trade early in the session but it looks like we have some buying coming now. Early in the trade session we saw a really wide range printed in the first five minutes of the bean trade. It kind of moved sideways and in just the last 30 to 45 minutes here we’ve drifted higher.”
So, who was off kilter coming into the report, the trade analysts, or USDA?
“I think that’s the million dollar question! Some of the chatter has been this higher than expected soybean reflection was kind of due to the fact that USDA had previously underestimated the size of the 2011 bean crop, so they might be making up some room there, but you have to trade these numbers. Whether right or wrong they’re going to move the trade and I think that’s what’s going on here today.”[audio:http://www.hoosieragtoday.com//wp-content/uploads//2012/09/Logan-Burgess-on-September-report.mp3|titles=Logan Burgess on September report]