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CORN IS CROPPED WHILE SOYBEANS GROW

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CORN IS CROPPED WHILE SOYBEANS GROW

Nov 12 2014, 11.25am GMT

Stock.com

Commodities are having bad press at present but that’s only the big picture.

Look into the detail of agricultural commodities and see a volatile market and rising charts. Production of soybeans and corn are painting different pictures with the same outcome, and though US stock levels are higher, it is volatile world production and high demand that are steering the commodity markets. Add to this some of the most adverse weather conditions in years and the agricultural commodity market becomes appealing to dealers looking to trade on volatility on an upward trend.

CORN – LOWER THAN FORECAST US PRODUCTION IS STILL HIGH WITH EVEN HIGHER DEMAND.

  • Corn production estimates have been trimmed by USDA, forecast 68 million bushels lower, but still a record at 14,407 million bushels.
  • The projected sorghum season-average farm price range is raised 20 cents on each end to $3.15 to $3.75 per bushel.
  • U.S. corn use for 2014/15 is projected higher with a 5-million-bushel increase in expected food, seed, and industrial use.
  • Corn used in ethanol production is projected 25 million bushels higher.
  • Ethanol demand is offset by a 20-million-bushel reduction in other food and industrial use.
  • Projected corn ending stocks are lowered 73 million bushels.
  • The projected range for the season-average farm corn price is raised 10 cents on each end to $3.20 to $3.80 per bushel. 

Source of figures: United States Department of Agriculture

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SOYBEAN – US PRODUCTION AHEAD OF FORECAST BUT WORLD PRODUCTION DOWN WHILE DEMAND REMAINS HIGH.

  • Soybean production is forecast at 3,958 million bushels, up 31 million on higher yields.
  • The U.S. season-average soybean price range is projected at $9.00 to $11.00 per bushel.
  • Soybean supplies for 2014/15 are projected 1 percent above the October forecast.
  • U.S. soybean exports for 2014/15 are raised 20 million bushels to 1,720 million reflecting the record pace of export sales through late October.
  • Soybean crush is raised 10 million bushels to 1,780 million mostly due to increased soybean meal exports.
  • Domestic consumption is reduced slightly in line with changes in the 2013/14 balance sheet.
  • Soybean ending stocks are projected at 450 million bushels, unchanged from the previous forecast.
  • Soybean and soybean product prices for 2014/15 are unchanged from last month.
  • Soybean meal and soybean oil prices are projected at $330 to $370 per short ton and 34 to 38 cents per pound, respectively.

As opposed to US production, the weather has hit hard in other world soybean areas. In Argentina, rain is postponing planting; in Brazil, planting is only 46 percent complete when it should be about 59 percent complete; then in the US the winter storms are threatening the Dakota fields with early snow. Though US production could probably withstand the storm, other areas of production will definitely affect world inventories and tighten the ‘supply versus consumption’ balance.

Source of figures: United States Department of Agriculture

MT4 CHART FOR SOYBEAN

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ARABICA COFFEE – PRICES VOLATILE AS MARKETS WAIT FOR HARVESTS

Coffee markets are currently waiting for the outcome of the Brazilian harvest, which has suffered two large adverse weather conditions this year; firstly drought then heavy rains. But this harvest represents a 35 % proportion of the total world market, making the harvest extremely important in terms of inventories and price.

Trade CFDs on corn, soybeans and coffee on STOCK.com with full training given to all clients.

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