Although corn and soybean prices took a tumble after USDA reported higher-than-expected yields for both crops in its World Agricultural Supply and Demand Estimates report for Nov. 9, the net outcome isn’t entirely bad news, says Ted Seifried, Zaner Ag Hedge.
USDA pegged corn yields at 175.3 bu. per acre, nearly 2 bushels higher than the trade guess, and soybean yields at 52.5 bu. per acre, up half a bushel from the average guess.
“We were down pretty sharply based on those numbers, but by the end of the day, soybeans had started to come back,” Seifried tells “AgDay” host Clinton Griffiths during the Agribusiness Update segment for Monday, Nov. 14. “We had a recovery day there Thursday, and then on Friday we were heavy, but you get the feeling it could have been worse.”
There are a few reasons for that sentiment, Seifried says.
“We ended up closing above some key support levels for both corn and soybeans,” he points out. “It’s really kind of tough this week to decipher what’s report reaction, and what’s tied into the USDA report, and what’s really tied into the election and money flow in general. … Given the chance to really push [prices] down at the end of the week, we didn’t quite do that. It’ll be interesting to see what happens next week [of Nov. 13] to see if we get a bit of a recovery from there.”
Prices could drift higher this winter as farmers lock their grain bins to see what happens with South American weather, Seifried says, but bigger production and larger carryover levels could mean the market might have “taken away a little bit of the need to build in South American weather premium.”