Chicago Board of Trade Market News
Outlook:USDA published the December WASDE on December 10 and estimated U.S. corn ending stocks for the 2013/14 season at 1,792 million bushels. The market expectation prior the release of the report was that there would only be a slight decrease in U.S. corn ending stocks to 1,871 million bushels from the November estimate of 1,887. Even though the data showed a larger-than-expected decline in ending stocks, it was not the outcome that bearish traders were looking for. There was an instant attempt to dismiss that fact and instead look forward for an anticipated increase in yields when the final data is release in January 2014. Of course, USDA’s data could also show an increase in domestic feed usage when the quarterly stocks data is released at the same time.
Corn futures have worked lower in the second half of this week due to additional influence of bearish news stories about Chinese rejections of corn shipments and opposition to the RFS. However, corn futures seem hesitant to trade lower at the present time. That may be partly because the feed grain data in the December WASDE was not extremely bearish:
– As previously mentioned, U.S. corn ending stocks for the 2013/14 season were reduced to 1,792 million bushels, which is down from the November estimate of 1,887 million bushels. This reduction happened primarily because of increases in U.S. corn exports and ethanol production.
– Even though USDA increased their corn production estimates for both Canada and Ukraine by 1 MMT each, total global corn stocks were reduced slightly due to increased consumption in the United States, EU, Ukraine and Canada.
– USDA left their Brazilian and Argentinian corn crop assessment unchanged in the December WASDE even through there is a common expectation that some South American acreage will be shifted from corn to soybeans.
– USDA made no adjustments to U.S. production estimates of sorghum or barley in the December WASDE.