PLEASE REFER TO THE HEDGE AND TRADE STRATEGY PAGE FOR UPDATES!! USDA has a track record of putting out bad news early in a crop year which when factored into balance sheets is bearish. One great example of this rut they are in is that they start out the year with some high estimate of soybean stocks, weak exports, burdensome soybean carryover projection which depresses markets, and then the after harvest when farmers have sold a lot of their crop, they get real and adjust production lower in the November production report. Corn basis here never dipped below par during harvest and is now +30 above CBOT at the ethanol plant. Our soybean basis is 45 under January. Basis levels for both corn and soybeans have been signaling for some time now that supply and demand were in better shape than the USDA and CBOT suggested. Heartland rains allow Mississippi river levels to recover. The WASDE report saw USDA reduce corn production by 61 mln bushel which came directly off the carryover with no adjustment being made to their demand estimates. They put it at 1.938 bln bushels…still a healthy carryover. RJO sees exports +75 mln bushels and ethanol crush…
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