0.6996 Down 0.0039(0.5500%) 12:23PM EST CDNvsUSD

[TOM4CWB]

0.6996 Down 0.0039(0.5500%) 12:23PM EST

Didn't take long to break 70 cents...

March 16 Canola up $3.20/t on USDA Report:

NEWS
USDA Reports Flash
Big Crops Got Smaller

Katie Micik DTN Markets Editor
Bio | Blog
25 minutes ago
WASHINGTON (DTN) -- USDA trimmed the size of the 2015 corn and soybean crops, forecast significant declines in winter wheat seedings and left Brazil's soybean production unchanged in the bevy of reports released Tuesday morning.


USDA released its latest Crop Production, Crop Production Annual Summary, Quarterly Grain Stocks, Winter Wheat Seedings and World Agricultural Supply and Demand Estimates (WASDE) reports Tuesday. (Logo courtesy of USDA)
At 11 a.m. USDA released its quarterly Grain Stocks, Annual Crop Production, Winter Wheat Seedings, the World Agricultural Supply and Demand Report and more.

Among the major highlights:

-- The U.S. soybean crop was pegged at 3.93 billion bushels, 1% lower than USDA's forecast in November and below the range of pre-report expectations. The national average yield is still a record at 48 bushels per acre.

-- USDA pegged the corn crop at 13.6 bb, down 53 mb on a lower national average yield.

-- Corn stocks as of Dec. 1 came in at 11.21 billion bushels. That's larger than last year even though the U.S. produced a smaller crop in 2015.

-- Soybean stocks are larger than they were in 2006-07 at 2.72 bb, even though demand in the first quarter was stronger than the five- and 10-year averages.

-- Pre-report wheat seedings estimates missed the mark by almost 3 million acres. USDA forecast farmers seeded 36.6 ma to winter wheat, while analysts expected from 39.3 ma.

-- USDA left Brazil and Argentina soybean production unchanged from last month at 100 million metric tons and 57 mmt, respectively. However, USDA did reduce Argentina's soybean ending stocks estimate based on higher domestic crush and exports. Brazil's ending stocks forecast increased slightly on an increase in beginning stocks.

-- China's expected to import 80.5 mmt of soybeans, unchanged from USDA's previous estimate.

For USDA's full Crop Production, Crop Production Annual Summary, Quarterly Grain Stocks and Winter Wheat Seedings reports, visit: http://www.nass.usda.gov/…

For the World Agricultural Supply and Demand Estimates (WASDE) report, visit: http://www.usda.gov/…

CROP PRODUCTION - ANNUAL

Farmers harvested a 13.601-billion-bushel corn crop in 2015, according to USDA's last estimate of production. That's down from 13.65 bb estimate in November and within the range of pre-report expectations.

The national average yield, at 168.4 bushels per acre, was 0.9 bpa lower than its previous estimates.

USDA pegged soybean production at 3.93 bb, a decrease from its previous 3.98 bb. It came in below the range of pre-report expectations. The national average yield is 48 bpa, 0.3 bpa lower than USDA's last estimate.

Sorghum production totaled 597 million bushels with a record national average yield of 76 bpa.

GRAIN STOCKS

Corn stocks totaled 11.212 billion bushels as of Dec. 1, USDA said. Farmers held 6.83 bb on-farm, down 4% from last year, and 4.38 bb in off-farm locations, up 6% from last year. It set a record for corn on hand after the first quarter of usage and was within the range of pre-report expectations. September-to-December disappearance totaled 4.12 billion bushels, down from 4.24 during the same period the year prior.

Soybeans stored in all positions totaled 2.715 billion bushels, which was close to the average pre-report estimate. Of the total stocks, 1.31 bb are stored on-farm, up 8% from last year, while 1.41 bb are stored off-farm, up 7% from last year. Total disappearance from September to December totaled 1.41 bb, down 6% from the same period last year.

Wheat stocks, at 1.738 billion bushels, are within the range of pre-report expectations. Farmers stored 503 mb on-farm, up 6% from last year, and 1.23 bb off-farm, up 7% from last December. Disappearance from September through November was 5% lower than the same period a year earlier at 359 mb.

WINTER WHEAT SEEDINGS

USDA said farmers seeded 36.6 million acres to winter wheat this fall, almost 3 million acres below the range of pre-report expectations. Of that, 26.5 ma was planted to hard red winter wheat, 6.7 ma planted to soft red winter wheat and 3.4 ma planted to white wheat.

WORLD AGRICULTURAL SUPPLY AND DEMAND ESTIMATES

USDA incorporated its updated production and quarterly Grain Stocks estimates into its latest supply and demand balance sheets for corn, soybeans and wheat.

CORN

USDA boosted its estimate of 2015-16 corn ending stocks to 1.802 bb, compared to its December forecast of 1.785 bb. That was within the range of trade expectations.

To get there, USDA incorporated lower production and a 10 mb increase in imports. It also cut food, seed and industrial use by 10 mb and exports by 50 mb.

The ending stocks-to-use ratio came in at 13.3%, compared to 13.1% last month. The national average farm gate price ranged from $3.30 to $3.90 per bushel, essentially sliding the range lower by a nickel.

Globally, USDA lowered ending stocks to 208.9 million metric tons, down from December's estimate of 211.9 mmt. It came in below trade expectations as USDA cut South Africa's corn production by 4 mmt.

USDA left Brazil and Argentina's corn production estimates unchanged at 81.5 mmt and 25.6 mmt, respectively.

The global ending stocks-to-use came in at 21.6%, compared to 21.8% last month.

SOYBEANS

USDA cut its forecast for 2015-16 soybean ending stock to 440 mb, compared to its December estimate of 465 mb.

In addition to its change in production, USDA lowered its export forecast by 25 mb and residual by 2 mb.

Ending stocks to use came in at 11.9%, compared to 12.4% last month. The national average farm gate prices were projected to average between $8.05 and $9.55 per bushel, shifting the range lower by 10 cents.

Globally, USDA pegged ending stocks at 79.3 mmt, down from last month's 82.58 mmt estimate. The forecast for Brazil's production was unchanged at 100 mmt. Argentina's production was also unchanged at 57 mmt.

The global stocks-to-use ratio was 25.2%, compared to last month's 26.4%.

WHEAT

USDA pegged wheat ending stocks for 2015-16 at 941 mb, higher than last month's 911 mb estimate. USDA cut its forecast for seed use by 6 mb and trimmed its feed and residual estimate by 30 mb.

That put ending stocks-to-use at 47.5%, compared to last month's 45.1%. The national average farm gate price ranged from $4.90 to $5.10 per bushel, narrowing the range by 10 cents on the high and low sides.

Globally, USDA increased its forecast for wheat ending stocks to 232 mmt, up from last month's forecast of 229.9 mmt and above the range of pre-report expectations. USDA left Argentina and Australia's production unchanged at 10.5 mmt and 26 mmt, respectively.

The global stocks-to-use ratio came in at 32.4% compared to 32.1% last month.

**

Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CST today as he analyzes the wide assortment of government reports out this morning, including the Annual Crop Production Summary, Winter Wheat Seedings, and Quarterly Grain Stocks. Sign up now at: http://www.dtn.com/…

U.S. CROP PRODUCTION 2015-2016 (million bushels)
Jan. Avg. High Low Dec. 2014-15
Corn 13,601 13,647 13,770 13,526 13,654 14,216
Soybeans 3,930 3,983 4,043 3,955 3,981 3,927
Sorghum 597 593 597 589 594 433
WINTER WHEAT ACREAGE (million acres)
Jan. Avg. High Low 2014
All Winter 36.6 39.3 40.8 38.3 39.5
Hard Red 26.5 28.7 29.6 27.6 29.0
Soft Red 6.7 7.2 8.5 6.4 7.1
White 3.4 3.4 3.5 3.3 3.4
QUARTERLY STOCKS (billion bushels)
(Report date 1/12/16) 12/1/15 Avg. High Low 9/1/15 12/1/14
Corn 11.212 11.250 11.800 11.073 1.731 11.211
Soybeans 2.715 2.718 2.852 2.590 0.191 2.528
Wheat 1.738 1.697 1.750 1.647 2.089 1.530
Sorghum 0.314 0.431 0.435 0.427 0.018 0.223
U.S. ENDING STOCKS (billion bushels)
Jan. Avg. High Low Dec. 2014-15
Corn 1.802 1.774 1.885 1.642 1.785 1.731
Soybeans 0.440 0.471 0.500 0.430 0.465 0.191
Sorghum 0.065 0.058 0.061 0.055 0.059 0.018
Wheat 0.941 0.919 0.947 0.891 0.911 0.753
WORLD ENDING STOCKS (million tonnes)
Jan. Avg. High Low Dec. 2014-15
Corn 208.9 213.1 221.0 209.9 211.9 208.2
Soybeans 79.3 82.5 84.0 77.5 82.6 77.7
Wheat 232.0 229.8 231.1 228.0 229.9 212.1
WORLD PRODUCTION (million metric tons)
2015-16 2014-15
Jan. Dec. Jan. Dec.
Argentina wheat 10.5 10.5 12.5 12.5
Australia wheat 26.0 26.0 23.7 23.7
Argentina corn 25.6 25.6 26.5 26.5
Brazil corn 81.5 81.5 85.0 85.0
Argentine soybeans 57.0 57.0 61.4 61.4
Brazil soybeans 100.0 100.0 96.2 96.2
(AG)

© Copyright 2016 DTN/The Progressive Farmer. All rights reserved.

[TOM4CWB]

Didn't help on the Beta,
Sorry

[SASKFARMER3]

People wanted Trudeau so here we go!

[ajl]

I don't think we need more evidence that Canada is a third world basket case economy. Replacing the oil industry with the marijuana industry is not going to cut it. Does anyone see any actual 'green shoots' of growth in the Canadian economy? One that is largely untainted by government largesse. I will have to admit the pulse industry in the last couple of years is real growth story?

[TOM4CWB]

Wheat... ALL IN... Should be quite a bouncy ride!!!

If you enjoy turbulence... here is why...

I LIKE his attitude! "** The article above is meant to be educational and is not a specific recommendation to buy or sell anything."

DTN NEWS
Todd's Take
All In

Todd Hultman DTN Grains Analyst
Bio
Tue Jan 12, 2016 06:19 AM CST
By Todd Hultman


In this high-stakes game of wheat poker, two players are all in, but only one has a good record at these cheap prices (DTN Source: ProphetX).
DTN Market Analyst

Perhaps you have heard the story about the young couple that took their first trip to Las Vegas. Wandering the casinos, they spotted a man with a big pile of hundred-dollar chips at the blackjack table and decided to mimic his every move. Surely, this was the guy to learn from.

As you can imagine, they soon lost their money and cut their trip short. Their mentor was no blackjack expert, but a pizza king from Chicago. He knew a lot about pizza, but not so much about blackjack.*

For anyone paying attention to grain news lately, you know how bearish the conversation has become, especially for wheat. While the U.S. dollar remains expensive, USDA is likely to cut its estimate of wheat exports again on Tuesday, putting 2015-16 on track for nearly 1 billion bushels of U.S. ending stocks and the lowest U.S. export total in at least three decades.

Commodities in general got another kick in the groin last week when China's stock market spooked financial markets with two limit-down moves and added to concerns that world economic growth will remain slow in 2016. Friday's larger-than-expected jump in U.S. non-farm payrolls gave U.S. dollar bulls even more reason to feel confident -- all of which was bearish news for U.S. grain prices.

In all of the turmoil, March Chicago wheat started the week poorly with a fresh break to new lows, and by all rights should have stayed down on the mat. But Friday's closing bell found prices up 8 1/2 cents on the week with no obvious explanation for the turnaround. The more interesting story surfaced later Friday afternoon when the CFTC released its weekly Commitments of Traders report.

CFTC data showed noncommercial investors holding 88,670 contracts net short as of Jan. 5, the largest bearish position in Chicago wheat on record. We don't know who the specific investors are, but we do know from CFTC definitions that they are not engaged in the business of handling wheat, and each holds at least 150 contracts, the threshold of reportable positions.

When we think of noncommercials, we typically think of big-money investors, Wall Street types with MBAs and a roomful of computer nerds writing trading programs -- an effort that DTN Senior Analyst Darin Newsom not-so-affectionately refers to as "Watson." Whatever the image, we do know from the history of noncommercial behavior that they are predominantly trend-followers.

As impressive as big money and Ivy League credentials may appear, noncommercials are not infallible and their trend-following mistakes have become humorously predictable. Somewhat like a novice driver that follows the GPS voice into a lake, noncommercials have become heavily short again at an extremely cheap price for the third time in less than a year and a half.

On the other side of the table, commercials are holding their largest net-long position on record -- 94,404 contracts -- and show no sign of backing down. We don't know specifically which grain company is holding the most wheat, but it is fair to say that the largest commercials have plenty of experience in these situations and are not likely to flinch. When it comes to demand, commercials know their stuff.

So the current situation in wheat has become a head-to-head competition with the biggest stack of chips the table has ever seen. Early last week when wheat sagged to new lows, it looked like nerdy little Watson was in the driver's seat, but then came Friday's higher finish -- a possible twitch of mounting nervousness.

And investors should be nervous. Trend-following has an impressive track record and becomes especially enticing when the fundamental mood reinforces the trend. But the Achilles heel of this approach tends to be revealed when value is ignored.

USDA estimates that it cost U.S. producers $7.13 to produce one bushel of wheat on average in 2015. Last Tuesday's noncommercial net-short position of 88,670 contracts corresponded to a close of $4.98 1/4 in December Chicago wheat, which is 30% below cost. Yes, the fundamental outlook is bearish, but how low are they expecting prices to go? Since 1980, the lowest that the December contract of Chicago wheat has ever traded is 46% below USDA's estimated cost of production.

In markets like these, when prices are cheap and the bearish news is obvious, noncommercials may look smart with their big pile of chips, but beware, they could be Chicago's pizza king. The last two big pots -- in September 2014 and May 2015 -- went to the world's largest grain companies, and this one probably will too. **

* Story paraphrased from Monsters and Magical Sticks by Steven Heller, Ph.D. and Terry Lee Steele, p. 25, 1987.

** The article above is meant to be educational and is not a specific recommendation to buy or sell anything.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

[perfecho]

Sk3...that's why a lot of people give up on these sights...blaming a gov that wasn't your choice for a commodity issue and a US dollar run...wow, no wonder farmers get labelled....

[perfecho]

Ahhh, delete last post....its not worth the effort...

[TOM4CWB]

perf

interesting times...

We are in the best governed country... in the richest country for natural resources... with the most stable banks... and grain industry... that moved all the crop they were asked to... still no one appreciates this... kind of ironic... isn't it?

[SASKFARMER3]

Tom and perfect it's not that great out their you guys have the NDP problem! Feds spending on useless environmental bullshit big problem!
So it's more than low oil!

[SASKFARMER3]

Also Tom grain is moving because guys grew less crop wasn't that big for some!

[perfecho]

Tom...wouldn't trade for else where, and am thankful each day....even if the Cons were back in power....another correct label ;-)
Time to do some chores....gotta love it when the weather is like this!

[Grahamp]

Well regardless of the politics I did have a 42 basis for a 2 13 hit this morning. (Yorkton)

[farming101]

End of December Mallee said that Australia was cutting
production forecasts for their wheat crop.

While there was one cut in the Nov/15 WASDE, today's
report made no adjustments to Aussie wheat.

Today's price action looks like a response to sharply
lower wheat acres in the US and not much else.

[MBgrower]

Sk3, not trudeaus fault (yet), its harpers fault for doing all possible to turn canada into a oil backed currency.

As for a 69 cent dollar, i no longer consider $7 new crop wheat or $11 canola good enough to lock in. What is the list price of a s690 now?

[Hamloc]

MB grower the Canadian dollar has mirrored the price of oil for over thirty years, to blame this on Harper is laughable. Look up the value of the dollar in 85-86 when oil was 10 dollars a barrel!