Good Morning

Yesterday’s WASDE report was a shocker to say the least. Expectations for corn yield were in the 177.4 bpa range compared to 178.4 in August. But favorable weather and record ears and ear weights drove the forecast to 181.3 bpa. This would eclipse the 2017 record yield of 176.6 by 4.7 bpa. Ending stocks were increased by 90 million bu. to 1.774 billion bu.
Soybean yields were increased 1.2 bpa from last month to 52.8 bpa. Carryout of soybeans now stands at 845 million bu. leaving the soybean stocks to use ratio just under 20%. (Producers that attended last Fridays meeting may recall what that means for cash prices). Despite the higher yield projections, soybeans managed to trade higher yesterday on rumors that the US is going to propose new Chinese trade talks. (Buy the rumor – sell the fact?)

Ethanol production for the week ending 9/7 averaged 1.02 mil barrels a day which is down 6% from a week ago and 3% from last year. Stocks totaled 22.9 mil barrels which is up 1% from last week and 8% from last year.
Weekly export sales were strong for both corn and beans. Corn came in at 30.5 mln bu. while soybeans were reported to be 25.5 mln bu. Both more than double their 10 week average.

Producers that have been holding out to market the last of their old crop corn and make sales for fall delivery timeframes have run out of time. Yesterday’s report gave us additional bearish news that will not be updated until November. Cash levels and basis levels have both dropped in the last couple months as we moved closer and closer to harvest. Look for basis levels across the country to widen as space becomes an issue with carryout from last year and the size of this years corn and bean crop. Producers should be actively locking in Basis levels for any grain they need to move.

Here are yesterday’s numbers:

USDA 2018/19 US Production (billion bu)
USDA Sept 12 Average Estimate USDA August
Corn Yield 181.3 177.8 178.4
Corn Production 14.827 14.529 14.586
Soybean Yield 52.8 52.2 51.6
Soybean Production 4.693 4.649 4.586

USDA 2018/19 Ending Stocks (billion bu)
USDA Sept 12 Average Estimate USDA August
Wheat .935 .941 .935
Corn 1.774 1.639 1.684
Soybeans .845 .830 .785

Have a Safe Day!

Garry Gard