(Recasts, adds USDA data, analyst reaction)
* USDA surprises with unchanged corn stocks
* Corn market may fall 3-5 cents
* USDA trims S.America soy crop, lowers stocks
* Soy market likely up 8-10 cents
* USDA releases supportive wheat stocks data; wheat seen up 3-5
By Sam Nelson
CHICAGO, April 10 (Reuters) – Corn futures look ready to slip 3 to 5 cents
per bushel in early trading on T uesday after the U.S. Department of Agriculture
maintained its previous estimate of U.S. corn ending stocks, surprising traders
who had expected a forecast reduction.
However, the USDA trimmed its forecast for ending wheat stocks and lowered
soy stocks as it slashed its forecast for South America’s soybean crop.
Traders said soybeans may rally 8 to 10 cents and wheat was seen climbing 3
to 5 cents per bushel at the 9:30 a.m. CDT (1430 GMT) opening of Chicago Board
of Trade Futures trading on Tuesday.
“My first question is, did the USDA take the month off? For the corn, they
kept everything the same but they put in their comments that they are looking at
early 2012 corn usage to take up the slack for 2011, which is kind of confusing
since they supposedly keep that separate,” said Mike Zuzolo, analyst for Global
Commodity Analytics.
USDA, in its April supply/demand and world crop production reports said the
supply of corn at the end of the August, the end of the current marketing year
(2011/12) would total 801 million bushels.
Although the total would be the lowest in 16 years, it was unchanged from
USDA’s forecast in March and defied analysts’ estimates for a 1 percent downward
revision to 721 million bushels.
“USDA chose to suggest there will be higher feed use for wheat and also the
early planted corn would be available in August and that would offset the
trade’s expectations of higher numbers for corn feed,” said Rich Nelson,
research director for Allendale Inc.
A majority of analysts expected USDA to trim its corn stocks estimate since
the government in its quarterly stocks report at the end of March had pegged the
corn supply below estimates, touching off a limit up move of 40 cents per bushel
in CBOT corn futures.
“It is still a little hard to explain how you have higher than expected
second quarter (corn) usage but make no changes on your balance sheet. We will
go right back to trading the weather,” said Shawn McCambridge, analyst for
Jefferies Bache.
The USDA forecast the ending stocks of U.S. soybeans at 250 million bushels,
down from 275 million in its March outlook and about in line with the average of
analysts’ estimates for 246 million.
Traders said the ending stocks number for soy was neutral to supportive but
they did express bullish surprise at the USDA’s forecast for Brazil’s soy crop
this year at 66.0 million tonnes, below an average of analysts’ estimates for
67.114 million. Argentine’s soy crop was pegged at 45.0 million tonnes, slightly
below an average of analysts’ estimates for 45.193 million.
“The report was a bit bullish overall on the beans, certainly the Brazilian
soy crop. People have been calling it that way but it’s nice to see USDA
confirming it,” said Jack Scoville, analyst for The Price Group.
A drought during the growing season has been leading to a series of reduced
production estimates for South America’s soy crop and in turn lifting soybean
futures to their highest level in seven months.
USDA lowered its outlook for U.S. wheat ending stocks to 793 million bushels
from the March outlook for 825 million. The wheat forecast was viewed as bullish
for wheat futures even though it was in line with an average of analysts’
estimates.
Prices at 8:48 a.m. CDT (1348 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 650.50 1.50 0.2% 0.6%
CBOT soy 1441.75 10.75 0.8% 20.3%
CBOT meal 392.00 3.20 0.8% 26.7%
CBOT soyoil 57.20 0.49 0.9% 9.8%
CBOT wheat 647.25 4.25 0.7% -0.8%
CBOT rice 1483.00 -4.50 -0.3% 1.5%
EU wheat 211.00 -0.25 -0.1% 4.2%
US crude 102.70 0.23 0.2% 3.9%
Dow Jones 12,914 -16 -0.1% 5.7%
Gold 1643.30 2.67 0.2% 5.1%
Euro/dollar 1.3093 -0.0013 -0.1% 1.1%
Dollar Index 79.8290 0.0960 0.1% -0.4%
Baltic Freight 928 0 0.0% -46.6%
(Reporting by Sam Nelson; Editing by Alden Bentley)
