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Soybean Futures Prices Drop On WASDE Report. (Feb 08, 2013)

Friday's Closing Futures Market Prices

Mar. corn closed at $7.09, down 1 and 3/4 cents
Mar. soybeans closed at $14.52 and 1/2, down 34 and 1/4 cents
Mar. soybean meal closed at $422.40, down $15.20
Mar. soybean oil closed at 51.43, down 42 points
Mar. wheat closed at $7.56 and 1/4, up 1/4 cent
Feb. live cattle closed at $126.45, down $1.10
Feb. lean hogs closed at $86.45, down 52 cents
Mar. crude oil closed at $95.72, down 11 cents
Mar. cotton closed at 82.67, up 127 points
Feb. Class III milk closed at $17.24, up 2 cents
Feb. gold closed at $1,666.00, down $4.40
Dow Jones Industrial Average: 13,992.97, up 48.92 points

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Corn futures initial reaction following the release of the USDA report was to trade lower, with the March contract losing 9 cents in the 35 minutes of trade following the release of the report. Futures recovered some of the losses in the afternoon trade, but they were pulled lower as soybeans sold off heading into the close. On the week March corn lost 27 cents or 3.67%. The CFTC report, which runs Tues to Tues, showed funds adding 18,533 longs to their positions. The USDA put corn ending stocks at 632 MB this morning, which was slightly higher than the average trade guess of 616 MB. The change came from a reduction in exports by 50 MB to end at a projected 900 MB. This lowering of exports was partially offset by an increase in feed and residual use by 20 MB. Argentinas corn production was lowered 1 MMT to 27 MMT, which was not as big of a cut as the trade was looking for and was more than offset by the 1.5 MMT increase in projected Brazilian production. The USDA lowered the 2013 average farm cash price 20 cents to end at $7.20. World ending stocks were raised to 118.04 MMT, up from 115.99 and above the average trade estimate of 115.57 MMT.    
March soybean futures lost 20 cents following the release of the USDA report. Losses stabilized over the noon hour, but heavy selling pressure showed up in the afternoon trade with soybeans losing  20 cents in the last hour of trade to close near the lows. Both the 100 and 200-day MA were breached on the March futures contract. US soybean ending stocks were lowered 10 MB to 125 MB, which was below the average trade guess of 130 MB. The cut in ending stocks came from an increase in US residual use. US soybean exports were left unchanged, which was a definite disappointment to the trade. The 2013 average US farm price was raised to $14.30. Argentina soybean production was lowered 1 MMT to 53 MMT, which was in line with the average trade guess of 52.9 MMT. Brazilian production was raised 1 MMT, which was above the average trade guess of 82.7 MMT. World soybean ending stocks were raised to 60.1 MMT, up from 59.46 MMT reported in Jan and above the average trade guess of 59.07.    
Wheat futures followed a similar path as corn in trade today. Future sold off following the release of the USDA report, climbed higher over the noon hour, then lost ground in the afternoon trade. On the week Chicago March wheat lost 9 cents, Minneapolis was down 15 cents, and KC was down 24 cents. The Tues to Tues Disag report shows net managed money continues to be bearish on Chi wheat as they increased their net short 10K contracts to bring the total to 27K contracts. The USDA report put US wheat ending stocks at 691 MB, down from the 716 MB reported on the Jan report and below the average trade guess. The cut in ending stocks came from an increase in domestic feed usage by 25 MB. US exports were left unchanged, signaling that the USDA is expecting exports to pick up as the US remains the cheapest in the world. World wheat ending stocks were 176.70 MMT, below the average trade guess of 177.01 MMT but up slightly from the Jan report.


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