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WASDE [Feb. 10, 2014]: Report was a ‘Surprise’ for Corn, Wheat

The World Agricultural Supply and Demand Estimates Report, or WASDE, was released today. Moe Agostino, Senior Managing Commodity Strategist for Farms.com had the following to say about the report:

“The 2014 February WASDE report was a surprise for corn and wheat. The USDA is now forecasting 13/14 corn ending stocks at 1.481 billion bushels, down 150 million vs. last month at 1.631 billion bushels and 139 million bushels lower than the pre-report estimates. The USDA adjusted the U.S. corn export pace up by 150 million bushels to 1.6 billion bushels more than expected. The 13/14 corn ending stocks number came in even lower than the lowest estimate at 1.574 billion bushels.

This will definitely provide support to nearby corn futures and could add to the rally that started at the beginning of January, however, short term it could be priced in. We will need a higher close today to keep the momentum moving higher.

The report was also a surprise for wheat futures as the USDA reported that 13/14 U.S. all wheat ending stocks at 558 million bushels on a higher export pace at 1.175 billion bushels, up 50 million bushels vs. last month. The all wheat ending stocks number was 50 million bushels lower than last month and 42 million bushels lower than the pre report estimates. As of Feb. 4, 2014 the speculators were still short 52,963 contracts according to the CFTC report and this latest USDA report will only cause these shorts to once again cover and provide for another “short covering rally”.

Next WASDE report comes out March 10.

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