At some point we as traders and marketers of grain will learn from the past mistakes and realize that when the strong majority is thinking the markets are going to move higher or lower following a report it will actually head the opposite direction. That was the case yesterday as most were expecting the markets to trade higher following the Crop Production and S&D.
Corn production figures came in above the average pre-report estimate and above the high-end of the range of expectations. NASS estimates the average national yield at 168.4 bushels per acre, up 0.2 bushels from last month’s report. Harvested area was lowered by 200,000 acres, but came in 300,000 acres above analysts’ expectations. Production is estimated at 13.779 billion bushels, down 20 million bushels from last month. Beginning stocks were also adjusted lower (-331 million bushels) reflecting the information from the Quarterly Stocks Report released on September 30. What made the report negative was a continued reduction in the overall demand expectations. Food & seed demand was lowered 15 million bushels, demand to produce ethanol lowered 50 million bushels and demand for exports lowered 150 million bushels. Offsetting to a degree was a bump to feed and residual usage of 125 million bushels. Ending stocks are now forecast to be 261 million bushels smaller than last month’s estimate at 1.929 billion bushels but 245 million bushels larger than pre-report expectations.
Soybean ending stocks were lowered again this month due to both decreased production forecasts and slightly higher demand expectations. NASS estimates the national average yield at 46.9 bushels per acre, down 1.0 bushels from last month’s report and lowered harvested area 300,000 acres. Production is now estimated at 3.550 billion bushels, down 83 million bushels from last month. Beginning stocks were also adjusted lower (-92 million bushels) reflecting the information from the Quarterly Stocks Report released on September 30. On the demand side, crush was raised 5 million bushels. Ending stocks are now forecast to be 180 million bushels lower than last month’s estimate at 460 million bushels.
Definitely not the weather we would like to see for harvest progress this morning with rains and cooler temps today. Rains should subside this afternoon but the cooler temps look to be in play for the next week with highs in the mid 50’s.
All markets are higher this morning with corn and soybeans both trading 9 higher as the focus shifts to US weather and the Chinese/US talks.
Have a Safe Day!