Doane Spotlight: USDA reveals need for more 'price rationing'
Soybeans: USDA raised the 2012 soybean production estimate by 44 million bu. on Jan. 11 by hiking both harvested acreage and average yield. But the boost was largely absorbed by higher estimates for crush and ending stocks rose only 5 million bushels, to 135 million. That still works out to just a paltry 16-day supply when, like corn, a 30-day supply is considered “minimum pipeline requirements” to handle the transition to new crop next fall. And, like corn, the Dec. 1 stocks in all positions figure for soybeans came in lower than expected, just not to the same degree.
Globally, it was a similar story as well. Even though USDA bumped the global production estimate up on prospects of record production in Brazil, it didn’t rise as much as the trade expected because it also lowered crop prospects for Argentina. Further, USDA reduced beginning stocks and raised usage estimates enough that projected global ending stocks still declined despite the record crop for Brazil. So, soybean futures popped higher as well.