USDA Jan 2014 Report

SOYBEAN: This month’s USDA report is termed as bearish for soy beans on increase in yield and production. Higher ending stocks for 2013-14 and increased production which is higher than the market expectation may bring prices under pressure.  This leads to a bearish data keeping the outlook weak from the report perspective. We expect the bears to dominate the markets during coming days on the back of the changes.  U.S. oilseed production for 2013/14 is estimated at 97.3 million tons, up 0.9 million tons from last month. Larger crops for soybeans, cottonseed, and peanuts are partly offset by reductions for sunflower seed and canola. Soybean production is estimated at 3.289 billion bushels, up 31 million bushels based on increased yields and harvested area. The soybean yield is estimated at 43.3 bushels per acre, up 0.3 bushels from the previous estimate. Soybean crush is raised 10 million bushels to 1.700 billion reflecting higher projected soybean meal exports, which partly offsets a reduction for Argentina. Soybean exports are increased 20 million bushels to 1.495 billion reflecting record shipments during the first quarter of the marketing year and strong sales through December. Soybean ending stocks for 2013/14 are projected at 150 million bushels, unchanged for last month.

CORN: With a marginal rise in production for 2013-14 and decline in ending stocks the outlook is positive from the USDA report perspective. Rise in production is marginal and may be mildly bearish for the corn prices. The market can trade firm with US corn ending stocks lowered from 1792 to 1631 million bushels.  Global ending stock is also lowered from 162.5 to 160.2 million tons. The record corn crop will definitely weigh on corn prices over the long term, unless the US export picks up. U.S. feed grain supplies for 2013/14 is projected lower with reduced production estimated for corn and sorghum. Harvested area for corn is raised 436,000 acres, but the estimated yield is lowered 1.6 bushels per acre to 158.8, reducing production 64 million bushels to 13.9 billion. Sorghum harvested area is lowered 148,000 acres and the yield is lowered 2.6 bushels per acre, reducing production 27 million bushels. Projected corn use for 2013/14 is raised with feed and residual use projected up 100 million bushels based on September-November disappearance as indicated by the December 1 stocks estimate.

WHEAT: The outlook for continues to be bleak for wheat on larger supplies and use with lower price expectation. Prices can be under pressure with mildly bearish corn and bearish soybean outlook. U.S. wheat supplies for 2013/14 are unchanged this month, but lower expected use raises projected ending stocks 33 million bushels. Feed and residual use is lowered 60 million bushels reflecting disappearance for June-November as indicated by the December 1 stocks released in the Grain Stocks report. The 2013/14 season-average farm price is projected 10 cents lower at the midpoint with the range narrowed to $6.60 to $7.00 per bushel.

COTTON: This month’s U.S. 2012/13 cotton forecast shows slightly higher production, resulting in a marginal increase in ending stocks. Production is raised 1000000 bales. Domestic mill use and exports are unchanged. Ending stocks of US is unchanged. The U.S. cotton estimates for 2013/14 are revised slightly to reflect higher production. Production is raised 118,000 bales from last month, due mainly to an increase for Texas. Domestic mill use is unchanged, but exports are raised to 10.5 million, leaving ending stocks unchanged at 3.0 million bales. The marketing-year average price is projected in a narrower range of 72-77 cents per pound, with the midpoint of 74.5 cents raised marginally from last month.

Commodity	Outlook
Soybean	Bearish
Corn	Mildly bullish
Wheat	Bearish
Cotton	Bearish