Good morning,
Markets are quiet to start the day with corn up 1 and soybeans down 3. Look for quiet trade today as we head into the weekend where harvest activity should be busy.
Next Tuesday’s USDA October Crop Production report revisions to the U.S. corn and soybean crops could have significant price ramifications if “surprises” are seen in either direction. With the historically tight corn and soybean balance sheets, heightened risk awareness heading into next week’s reports is paramount.
The USDA’s October 12 WASDE report could have/likely will have a two-fold fundamentally friendly impact on the 2022/23 U.S. corn balance sheet. Not only will USDA be lowering 2022/23 beginning stocks by 148 million bushels from last month as a result of the September 30 Grain Stocks report, but their current 13.944 billion bushel (172.5 bushel/acre) estimate of this year’s crop is likely to be lowered further, as well. Accordingly, with USDA’s 2022/23 U.S. corn ending stocks estimate already sitting near perceived minimum pipeline stocks of around 1.2 billion bushels, any reduction in supplies likely will prompt a comparable reduction in demand, as well.
So far, U.S. corn export sales are running at a rather slow pace with total commitments of only 521 million bushels vs 1.046 billion at this time last year, the fourth lowest of the last ten years as of late September and represent 23% of the USDA’s current 2.275 billion bushel export projection. With any additional cuts to production and carryout we will see prices tick higher which will result in less demand for US corn. Stocks may be tight, but high prices cure high prices!
Have a safe day!
Garry Gard
920-348-6844
