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09

November USDA Supply & Demand

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The USDA surprised traders with a record 175.4 bushel/acre U.S. corn yield in today's Supply/Demand report, 0.8 bushels above last year's record and a whopping 3.0 bushels above the average trade guess. As a result, 2017/18 corn production increased 298 million bushels. Increased production was partially offset by a 75 million bushel bump in exports and a 25 million bushel increase in feed and residual. Ending stocks increased 147 million bushels to 2.487 billion bushels, 121 million bushels above trade expectations.

 

World corn ending stocks came in at 203.86 million tons, a 2.9 million ton increase from last month and 2.7 million tons above the average trade guess.

 

Soybean yields were unchanged at 49.5 bushels/acre, missing trade guess looking for a modest 0.2 bushel reduction. Production was reduced slighty, likely due to rounding, which resulted in ending stocks coming in 5 million bushels lower than last month at 0.425 billion. The USDA made no adjustments to demand.

 

World soybean ending stocks increased 1.85 million tons to 97.90, 0.6 above the average trade guess.

 

 

Wheat yields were unchanged at 46.3 bushels/acre. Demand increased 25 million bushels on stronger exports. As a result ending stocks came in at 0.935 billion bushels, down 25 million bushels from last month and below trade expectations for 0.957 billion.

 

World wheat ending stocks decreased by 0.6 million tons to 267.53, above trade expectations for a 1.35 million ton reduction. The reduction was primarily lead by lower carryouts in U.S. and Brazil.

 

 

Corn and soybean futures initially slipped 2-3 cents after the numbers came out, appearing to hold those limited losses until finally giving way to selling pressure an hour before the close. Wheat futures were flat to slightly higher following the release of the numbers. Minneapolis wheat has moved up 4-5 cents since, which KC and Chicago wheat holding onto small gains.

 

We find it supportive that December corn futures are only down about 6 cents in the face of another record corn crop. January soybean futures are down 13 cents at this time, giving back most of the premium traded on the idea bean yields were going to get smaller. We believe better selling opportunities are ahead, once the U.S. crop is put away and traders are more concerned over crop production issues in South America.

 

 

 

2017-18 USDA U.S. Yield (bu/acre)
 
USDA
Nov
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Oct
2017-18
Corn
175.4
172.4
171.7-174.0
171.8
Soybeans
49.5
49.3
48.9-49.9
49.5

 

2017-18 USDA U.S. Production (bln bu)
 
USDA
Nov
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Oct
2017-18
Corn
14.578
14.333
14.250-14.459
14.280
Soybeans
4.425
4.408
4.375-4.467
4.431
Wheat
1.741
 
 
1.741

 

2017-18 USDA U.S. Grain Carryout (bln bu)
 
USDA
Nov
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Oct
2017-18
Corn
2.487
2.366
2.286-2.438
2.340
Soybeans
0.425
0.420
0.377-0.461
0.430
Wheat
0.935
0.957
0.940-0.980
0.960

 

2017-18 USDA World Grain Carryout (million tons)
 
USDA
Nov
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Oct
2017-18
Corn
203.86
201.18
197.60-203.50
200.96
Soybeans
97.90
95.50
93.00-97.00
96.05
Wheat
267.53
266.78
261.00-269.00
268.13
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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.