USDA releases most important report of the year

By Doug Tenney, Leist Mercantile

Have you watched the grain markets in recent weeks with the same attitude as watching paint dry? It takes forever. Well it’s finally here. The long awaited January 11 USDA crop reports were released today at noon. Corn production for 2012 was estimated at 10.78 billion bushels with a yield of 123.4 bushels per acre. Soybean production was pegged at 3.015 billion bushels and a yield of 39.6 bushels per acre.

Traders had expected today’s price reactions to be violent, swift, and volatile. Traders viewed corn as bullish, soybeans negative to neutral, and wheat bullish.

The trade has been talking about this report heavily for the past month. Many view today’s report day as the most important one for the entire year. It consists of four major reports; final corn and soybean production numbers for 2012, Dec. 1, 2012 quarterly grain stocks, the normal monthly supply and demand report, and lastly, estimated 2013 U.S. winter wheat acres.

Just moments before the report was released, corn was down 11 cents, soybeans were down 17 cents, and wheat was up 2 cents. At 12:20 pm corn was up 9 cents, soybeans down 17 cents, and wheat was up 16 cents. March corn has a big pivot number at $7.20 while the March soybean pivot number is $13.56.

Corn ending stocks were 602 million bushels, the average trade estimate was 675 million bushels. Soybean ending stocks were 135 million bushels. The average trade estimate was 133 million bushels.

In the grain stocks report, corn stocks as of December 1, 2012 were 8.03 billion bushels. Soybean stocks were 1.97billion bushels.

Total U.S. winter wheat acres were 41.8 million acres. Last year the number was 41.3 million acres.

This is a brand new report time for the major USDA crop reports. The previous time was 8:30 am eastern.  That report release time has been in effect since 1994. Just a note that the weekly crop progress reports as well as the monthly cattle on feed reports and the quarterly hog reports will continue to be released at 3 p.m. eastern time.

Prior to the report, traders were focused on the quarterly corn stocks number as the most important corn number. In soybeans the most watched number was the final production number for 2012.

The next USDA supply and demand report will be Friday, Feb. 8, 2013. In coming weeks traders will begin to focus on the all important planting intentions report which is Thursday, March 28, 2013.

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