U.S. wheat ended more than one per cent lower on Wednesday in volatile dealings after the U.S. Department of Agriculture’s (USDA) April estimates for 2012-13 global ending supplies were well above analysts’ estimates.
Corn ended higher but below the trading session highs and soybeans turned down after an initial rally in reaction to the USDA stocks numbers, with the U.S. data seen supportive to markets while global data was viewed as bearish.
“It’s very simple. The U.S. numbers were below estimates and that brought in an initial pop, especially in corn but the global numbers are all above estimates. They dug deeper into the report and the global numbers were all bearish,” said Mike Zuzolo, analyst for Global Commodity Analytics.
Read Also
Field-by-field mapping could improve yield, productivity predictions
University of Saskatchewan researchers are using field border mapping to collect data on field variability, including problematic weeds, and to predict things like yields.
After the report was released, bellwether Chicago Board of Trade (CBOT) May wheat traded in a big range of roughly 25 cents per bushel, May corn 32 cents and May soybeans 24 cents (all figures US$).
USDA’s April supply and demand forecasts for the ending supply of U.S. corn and soybeans for the 2012-13 marketing year were below analysts’ estimates but the ending supply of U.S. wheat was above an average of analysts’ estimates and the forecast for global ending wheat stocks was sharply above estimates.
Global ending stocks of corn and soybeans also were well above trade and analysts’ expectations.
“I was on the trading floor and when the U.S. numbers came out corn just exploded to 22 (cents per bushel) higher at one point, then when the world numbers came out, everything dropped,” said Kevin O’Bryan, analyst for Olympus Futures.
CBOT May wheat closed down 12 cents per bushel at $6.96-3/4, May corn was up 4-3/4 cents at $6.49 and May soybeans were down 2-3/4 at $13.92-3/4.
“The corn number was pretty much in line with trade estimates. We had the initial jump in the market but then it settled down. There is still a lot of debate about how much corn is out there and that will continue,” said Harry Bormann, grain team leader for MaxYield Co-op.
USDA in its quarterly stocks report in late March shocked the market by pegging the U.S. corn supply for the beginning of March well above trade estimates.
That report made forecasting ahead of Wednesday’s data extremely difficult and led to a huge 300 million-bushel range of estimates for the expected ending stocks of corn for the current 2012-13 marketing year, which closes at the end of August.
USDA’s soybean and wheat quarterly stocks also were above trade estimates.
Last year’s drought in the United States had trimmed U.S. domestic supplies but now global stocks are increasing, making up for the tightness in U.S. supplies.
“World production is going to help plug our gap in tightness in the old crop. That is the theme of this report,” said Don Roose, analyst with U.S. Commodities.
— Sam Nelson reports on the CBOT grain and soy markets for Reuters in Chicago.
