Kevin Van Trump, Founder

November 8, 2013

2 Min Read

The USDA released it's first major reports since September, after the government shutdown put a damper on the October reports. Here's a breakdown of the November WASDE, as well as what we're hearing from large traders about a long-term cycle for corn.

Corn

Total production raised by 146 million bushels while total demand jumped by 275 million. Net-net the market is slightly higher on the news.

•    Yield reported @ 160.4 bpa yield … up 30% vs. last year

•    Total Production @ 13.989 billion bushels 

•    Harvested Acreage @ 87.2 million

•    Ending Stocks @ 1.887 billion…  up 129% vs. last year

•    Global Ending Stocks @ 164.33 

•    Exports - pushed higher from 1.225 billion to 1.40 billion  

•    Ethanol Usage - Unchanged. 

•    Feed Usage 5.1 to 5.2 billion bushels - Tough to argue for higher feed usage numbers when the most recent Cattle on Feed report shows net placements 1% smaller than the previous year. 

•    Brazilian corn crop lowered from 72.0 to 70.0 million metric tons

 

Soybeans

Total production raised by 109 million bushels while total demand jumped by 110 million. Net-net the market is slightly higher on the news.

•    Yield reported @ 43.0 boa yield 

•    Total Production @ 3.258 billion bushels

•    Harvested Acreage @ 75.7 

•    Exports raised from 1.370 to 1.450 billion bushels 

•    Crush 1.655 to 1.685 

•    Ending Stocks @ 170 million 

•    Global Ending Stocks @ 70.23 

 

Large traders are starting to talk about a long-term bearish cycle for corn, wheat and soybeans starting to settle in. The fear is that with no major weather hiccup corn could be the immediate leader to the downside, followed by wheat in early-2014, then soybeans by mid-2014.

The main argument by the bears, which is hard to refute, is that ethanol basically kicked off the rally we have been so fortunate to be a part of for the past five plus years. The growth in ethanol coupled with the extremely poor growing conditions created the perfect environment for a major price rally. Take away the strong growth in ethanol, which is obvious by the EPA's move to try and reduce the mandate, and big oil starting to put up a major fight, then half of the bullish tag-team is no longer. Weather…who knows? The point is: Ethanol growth was the sure bet, weather provided some additional excitement, but one without the other is going to be like "Laurel without Hardy," "Sonny without Cher," or "Brooks without Dunn"... It just ain't the same!

About the Author(s)

Kevin Van Trump

Founder, Farmdirection.com

Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead. 

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