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Uncertainty prevails

Date Added: 01/07/2011

Markets for grains and oilseeds went down yesterday on the following news from the USDA.

 

Acres:

Corn=92.3 million vs. trade estimate of 90.6 million.

Soybeans=75.2 million vs. 76.4 million trade guess.

Spring Wheat=13.6 million vs. trade estimate of 13.2 mil acres.

 

Grain Stocks

Corn= 3.671 billion bushels vs. the trade estimate of 3.290 bil bu.

Soybeans= 619 million bushels vs. the trade's average estimate of 592 mil bu.

Wheat=861 million bushels vs. the average trade estimate of 823 mil bu.

 

 

All the news was bearish apart the reduction in soya acres, but this was more than outweighed by increased soya stocks and the dramatically higher figures for acres and stocks of corn.  The corn market subsequently went limit down and was in the near position without a limit was trading 12% down at one stage. Although less soybean acres was supportive the soybean also fell 30 cents.

 

Needless to say the dramatic movements came as a surprise to most of the trade and there is a theory that the increase in corn acres is based on intentions that were unable to be completed due to wet weather.

 

As regards oilseed rape the market fell 7 euros yesterday but is supported today. Ex farm oilseed rape remains valued at about £380.00 ex for harvest. The supply demand for oilseed rape will be very tight for this coming year so expect prices to remain supported.

 

Regards,

 

Owen

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