Crop markets continue performing well after recent USDA reports
Corn futures continued their bullish reaction to the January 11 release of USDA data Monday. Surprisingly tight December stocks, the sharp upward revision in forecast 2012-13 U.S. feed usage and the resulting reduction in the anticipated 2012-13 carryout probably powered the advance. The maize market continued rising Monday night, possibly due to bullish momentum, but we would also point out that a Taiwanese firm issued a tender for 60,000 tonnes of corn early this morning. The short-term outlook may depend upon the ability of the nearby contracts to sustain their early-morning push above their respective 40-day moving averages. That might signal a major shift in the recent trend. March corn had risen 3 cents to reach $7.27/bushel in the pre-dawn hours, while December had edged 3/4 cent higher to $5.84 3/4.
Although CBOT soybean futures initially reacted rather poorly to the USDA data released last Friday, traders seemed to be much more impressed with the 470,000-tonne reduction in the USDA forecast for ending-2013 global soybean carryout over the weekend. Futures rose strongly Sunday night, then accelerated upward in reaction to Monday morning news that China had bought 120,000 tonnes of beans for delivery in the current crop year. They continued rising in Tuesday morning trading, but technical resistance associated with their 40 and 50 day moving averages may act as a major obstacle to further short-term gains. March beans look set to open the CBOT pit session 8 1/4 cents higher at $14.26 1/4 this morning, while March soyoil climbed 0.28 cents to 50.73 cents/pound in early electronic action and March meal rose $1.2 to $418.7/ton.
News that the USDA estimate of 2012 winter wheat plantings had fallen well short of industry forecasts, as well as its cut to U.S. 2013 wheat carryout apparently boosted wheat futures over the weekend. Concerns about the potential size of the winter wheat crop due to persistent drought over the Great Plains seemingly offered support for U.S. wheat futures as well. The various wheat markets continued their advance in the overnight hours, possibly due to reported reductions in the 2012 Ukrainian harvest. As with corn and soybeans, forthcoming wheat market direction may depend upon the ability, or lack thereof, of nearby futures to overcome technical resistance at slightly higher levels. March CBOT wheat added 5 cents, to $7.72/bushel, to its recent advance Monday night, while March KCBT wheat gained the same amount to $8.28 1/2 and March MGE futures surged 4 cents to $8.56 3/4.