On Thursday, the USDA released its October crop production report, forecasting corn at 14.3 billion bushels, a 6 percent decrease from 2016. Yields are expected to see an average of 171.8 bushels per acre, which could be the second highest yield in the U.S.
On the soybean side, production is expected to see a record 4.43 billion bushels, a 3 percent increase from 2016. The average soybean yield is estimated to be 49.5 bushels per acre according to conditions on Oct. 1.
These numbers have market analyst pouring through the numbers and looking for indicators of price direction.
“You’re throwing several additional acres, a little bit less yield and you have essentially the same size crop you had before, whereas a large part of the trade is concerned that we’re going to end up substantially higher on total production than where we came in due to lower yield,” said Matt Bennett, owner of Bennett Consulting and farmer in Windsor, Ill.
To Joe Vaclavik, president of Standard Grain, the USDA is slightly adjusting the demand picture as well.
“We still have a pretty lofty soybean demand projection for exports especially,” he said. “For corn, it’s kind of status quo. All in all, demand is still strong.”
According to Vaclavik, Thursday’s market reaction is setting the corn market up for a seasonal bottom.