USDA’s Jan. 11 report for soybeans is considered neutral with the projection for U.S. ending stocks the same as the average estimate of at least one poll of trade analysts.
Grain stocks were estimated at 14 million bushels lower than the average trade estimate indicating higher domestic usage than earlier thought.
Crush was increased 35 million bushels and residual use raised 4 million bushels. However, production was bumped up 44 million bushels from last month on a 400,000 acre increase in harvested acres to 76.1 million acres and a 0.3 bushel per acre increase in yield to 39.6 bushels per acre.
Ending stocks were increased 5 million bushels from last month to 135 million bushels and a 4.4 percent stocks to use ratio.
The season average price was lowered 5 cents on the bottom side and 55 cents on the top side from last month and is projected to range from $13.50 to $15.00 a bushel.
Global stocks are projected to drop slightly by 17 million bushels to 2.185 billion bushels with a stock to use ratio of 22.6 percent.
The projected record South American crop is up 18 million bushels from last month with Brazilian production up and Argentine production down.
March soybeans closed Friday at $13.73 ¼, down 6 ½ cents per bushel with support at $13.38 and resistance at $13.99 with a strong sell bias.
November soybeans closed at $12.66 ¼ a bushel, down 15 ¾ cents Friday. Support is at $12.42, resistance at $13.00 with a strong sell bias.
Under current conditions, I would not expect 2013 prices to be at the level of 2012. We might should start pricing accordingly and look for rallies to $13 and above as pricing opportunities.
As in corn, weather will be a major factor. I would be 5 percent priced on 2013 production, but watching closely.
Over the past 31 years the average difference between the January projection for U.S. ending stocks and the final estimate has been 62 million bushels with 7 years below the final estimate and 24 years above.
The next USDA Supply & Demand report will be released Feb. 8, 2013.
(For Chuck Danehower’ comments on the corn report, click here).