Kleist Comments

Closing Comments on USDA reports: 7/11/14
Closing Comments on USDA reports: 7/11/14

Closing Comments on USDA reports: 7/11/14

Corn:
Exports: None Visible.
Comments: USDA: I much more liked the release of reports outside of trading hours, if for no other reason not seen mimicking the already traded action.
And have time to write/ponder them. Just too busy in mid-trade sometimes.

The USDA reports obviously bearish though a lot of it rolled into prices already: production was lowered on lowered harvested acres not a surprise. What might have happened has been our fear over demand as old crop feed usage was dropped 125mln.bu. an new crop by 50mln. (wheat part of that and as such the unchanged export number might be vulnerable as well); world carryover was up another 5.3mln.m/t’s and up 4.0mln. from trade estimates; China/Brazilian/Argentine crops all unchanged as well; avg. USDA farm price fell $.20 to $3.65-4.35. Tough to argue the low side, maybe even more.

Polar vortex returns next week! But a ‘summer one’ with temps. into the low 50’s at night. Not sure anyone will bring up lost ‘growing degree days’.

SOYBEANS:
Exports: None Visible.
Comments: USDA: acreage harvested rose by 3.3mln. and rose production with it by 165mln.bu. at 3.800bln.; new crop carryover raised 90mln. with a higher carry-in of 15mln. offset in part as crush raised 40mln. and exports raised 50mln., seed up 4mln. (residual use was a minus (-) 69mln.); old crop carry was raised 15mln.; world soybeans also bearish. Avg. farm price $9.50-11.50 and I’ll not argue over the low number yet. Old crop beans? What can I say?

Wheat:
Exports: None Visible.
Comments: USDA: hard to beat wheat up much more but it did: U.S. production higher than expected (weather bulls awhile back have any questions?); carryover higher than expected; U.S. numbers black and white with carryover raised 81mln.bu. with production up 50mln. (yld. up .8bu,/acre) amid an increase of 300,000 harvested acres and feed use dropped 15mln. and exports lowered 25mln. Avg. price $6.00-7.70 off $.35/$.45 from previous. Might be a bit optimistic.

NOTA’ BENE:
This report overall states U.S. farmers will be significantly stressed financially and if weather holds up, might cause a farm land value crisis as crops go to price levels not seen in quite awhile. Keep a marketing plan at hand. It’d be nice to say all was hedged a month or two ago but we all know there was a lot of hesitation to do so.

2) No livestock closing comments and have not had a chance yet to get through the USDA numbers for meats. Will advise. Initial overview did not seem that bullish.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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