USDA’s Dec. 11 Supply & Demand 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.
For the 2012/13 crop year, the only adjustment to the balance sheet was a 10 million bushel increase in crush, with a corresponding decrease in ending stocks to 130 million bushels.
The season average price was lowered 35 cents on both ends from last month and is projected to range from $13.55 to $15.55 a bushel.
The stocks to use ratio dropped 0.35 percent to 4.3 percent.
Global new crop stocks are projected to drop slightly by 3.3 million bushels to 2.202 billion bushels with a stocks to use ratio of 22.9 percent.
The projected record South American crop is unchanged from last month.
January soybeans closed at $14.72, after the report, down 2 ¾ cents per bushel with support at $14.44 and resistance at $14.92 with a sell bias.
I am currently priced out of 2012 production.
There does not appear to be any advantage to storing other than price speculation.
That may be better served by selling soybeans and buying an out of the money March or May call option. A $15.20 March Call would cost 33 cents. I would not store un-priced without setting a floor price.
A March $14.70 Put would cost 48 cents and set a $14.22 futures floor. This option expires Feb. 22, 2013.
November 2013 soybeans closed at $13.21 ½ a bushel, down 13 cents Tuesday. Support is at $13.10, resistance at $13.48 with a buy bias.
Watch for 2013 opportunities for pricing. I would be 5 percent priced on 2013 production.
Over the past 31 years the average difference between the December projection for U.S. ending stocks and the final estimate has been 70 million bushels with 9 years below the final estimate and 22 years above.
The next USDA Supply & Demand report will be released Jan. 11, 2013.