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09

November USDA Supply & Demand

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The USDA drastically increased corn and soybean yields over the trade guess in today’s mid-day supply/demand report. The corn yield was increased just over the high end guess to 175.3 bu/acre, right at the INTL FCStone estimate. The average trade guess was 173.4 bu/acre. Total production was increased without an acre adjustment to 15.226 Billion bushels. Demand increased but not by enough to hold carry out to the trade guess as ending stocks came in at 2.4 Billion bushels, 100 million above the trade guess average.

The average farm gate cash price was increased in corn to $3.00-3.60, suggesting USDA economists see typical growing risk through peak S. American and U.S. growing seasons.

World ending stocks came in at 218.19 million tons with expectations at 216.94 million tons, considered bearish but not as out of line as the U.S. balance sheet.

The report brings a bearish influence on prices as we now look at S. American weather risk where a decent start is underway but not without some issues.

In soybeans, the USDA increased yields to 52.5 bu/acre, right at the high end trade guess of 52.8 bu/acre. Acreage was again left unchanged, demand increased by just 7 million bushels leading to an increase in carry out to 480 million bushels vs a trade guess of 420 million bushels.

The average farm gate cash price was increased in soybeans to $8.45-$9.95 which points to the USDA’s expectation prices would be higher through peak S. American and U.S. growing seasons.

World ending stocks came in at 81.53 million tons vs trade expectations for 76.98 million tons, all on higher U.S. production and no changes in S. America.

For wheat, the USDA estimated U.S. ending stocks at 1.143 Billion bushels vs a trade guess of 1.141. World ending stocks were pegged at 249.23 million tons vs. a trade guess of 247.8 million tons and up from 248.37 million tons last month.

2016-17 USDA U.S. Yield (bu/acre)
 
USDA Nov
2016-17
Average Trade Est.
Range of
Trade Est.
USDA Oct
2016-17
Corn
175.3
173.2
171.4-175.3
173.4
Soybeans
52.5
52.0
51.3-52.8
51.4
Wheat
52.6
 
 
52.6

 

2016-17 USDA U.S. Production (bln bu)
 
USDA Nov
2016-17
Average Trade Est.
Range of
Trade Est.
USDA Oct
2016-17
Corn
15.226
15.041
14.880-15.226
15.057
Soybeans
4.361
4.314
4.256-4.386
4.269
Wheat
2.310
 
 
2.310

 

2016-17 USDA U.S. Grain Carryout (bln bu)
 
USDA Nov
2016-17
Average Trade Est.
Range of
Trade Est.
USDA Oct
2016-17
Corn
2.403
2.300
2.2143-2.669
2.320
Soybeans
0.480
0.420
0.381-0.467
0.395
Wheat
1.143
1.141
1.126-1.169
1.138

 

2016-17 USDA World Grain Carryout (million tons)
 
USDA Nov
2016-17
Average Trade Est.
Range of
Trade Est.
USDA Oct
2016-17
Corn
218.19
216.94
214.00-224.90
216.81
Soybeans
81.53
76.98
72.50-79.14
77.36
Wheat
249.23
247.85
244.20-250.40
248.37
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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.