I apologize for the multiple Pre-Opening comments sent out today. Today's correct Pre-Opening Comments are below. Sorry for any confusion this may have caused.
CORN: 2 lower
Well, I have to admit that I am a little surprised by this morning’s numbers. Let’s start with the 2011/12 carryout which was left unchanged at 801 million bushels. The average trade guess coming into the report was 784 with most traders thinking that we would see some adjustment in either exports and/or ethanol usage. Worldwide carryout dropped from the 125.35 MMT of last month to 124.53 MMT this morning which was still above the average trade guess of 123.469 MMT. Probably the biggest surprise was that they left the size of the corn crop in Argentina unchanged while actually raising the size of the crop in Brazil by 1 MMT. The conventional wisdom had been that the rains that arrived in South America were too late to help the corn crop.
We will probably trade this report for a day or two and then I look for the trade’s attention to now start to shift to the Planting Projection report and the early planting pace.
SOYBEANS: 5 higher
The domestic bean carryout for 2011/12 was left unchanged at 275 versus the average trade guess coming into this report of 257 million bushels. On the international front we saw the world carryout actually drop below the average trade guess. A month ago we were at a projected carryout of 60.28 MMT and this morning’s report places us at 57.3 MMT, slightly below the average trade guess of 57.758. In looking at the South American numbers they dropped the projected bean production in Brazil from 72 MMT last month of a projected 68.5 MMT this morning. Argentina slipped from 48 MMT in February to 46.5 MMT this morning. We have had private analysts in recent days peg the Brazilian number between 66 and 67 MMT so I would not be surprised to see their production slip again in next month’s report. That would actually follow the pattern of behavior that we saw during the 2008/09 South American drought. If you look at the combination of the USA, Argentina and Brazil we are down 12.8 MMT from the projected carryout a year ago. I continue to believe that as we move into the 2012/13 crop year the bean complex has the potential to be explosive.
We are going to get projected planting acres from Informa this morning and it will be interesting to see if they stray from the 75 million that the Ag Forum gave us to play with.
WHEAT: 2 lower
We saw the USDA increase exports by 25 million in this mornings report while dropping the carryout from 845 million bushels to 825 million bushels. The average trade guess was 838 million bushels. On the world scene 213.1 MMT last month to 209.58 MMT this morning. If there was anything that stood out to me it was that production in Ukraine was left unchanged at 22 MMT while in Kazakhstan it slipped very marginally from 22.75 to 22.73 MMT. With the stories of weather woes that we have seen coming out of those nations I thought we might see a more significant change in their numbers.
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