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Corn Outlook:
The January Crop Report offered a surprise this week as the USDA raised their yield estimate for corn 1.0 bpa to 173.3 but lowered harvested acres 1.6 million to 79.2 million which was below the lowest estimate. This resulted in production falling 200 MB to 13.730 BB and was below guesses. Meanwhile, ending stocks slipped 15 MB to 1.242 BB. They would have been lower if exports had not been trimmed 150 MB and usage cut 185 MB. Global stocks declined 2.0 million tons to 296.4 million with Argentina’s crop falling 3.0 million tons, and Brazil’s declining 1.0 million. The report created enthusiasm among the bulls because of the unexpected cut to production. However, keep in mind that while stocks tightened, global and domestic usage declined. This poses a head wind down the road.
Bean Outlook:
USDA gave traders a surprise in soybeans when they lowered their yield estimate more than expected to 49.5 bpa. Harvested acres were reduced 300,000 which resulted in production falling 70 MB to 4.276 BB. Meanwhile, ending stocks are down only 10 MB to 210 MB. This is because exports are being lowered 55 MB and usage 59 MB. World stocks, on the other hand, rose 800,000 tons to 103.5 million. Everyone had their eye on Argentina’s crop, and it was cut 4.0 million tons, but Brazil’s was up 1.0 million. Meanwhile, Brazil’s exports are forecast to rise 1.0 million tons while China’s imports are projected to fall 2.0 million tons. While the report has stirred some bullish interest, some issues must be kept in mind. Global stocks have risen, U.S. exports are down, but Brazil’s are up, and demand from China has fallen.
Wheat Outlook:
There were no thrills in the crop report for wheat. Ending stocks are down 4 MB to 567 MB while global stocks are up 1.1 million tons to 268.4 million. Meanwhile, all winter wheat seedings are at an 8-year high of 37.0 acres, 3.7 million more than a year ago. Hard red winter wheat acres are up 2.2 million to 25.3 million, while soft red winter wheat acres rose 1.3 million to 7.9 million.
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