The Hueber Report

While the sheen was not even off the numbers yesterday, debates had already begun as to the accuracy or lack thereof in this latest USDA report.  Realistically, such dispute is common after any government release but promoting the discussion this time was the slower than normal pace of the harvest this fall.  It would stand to reason that with fewer than normal acres harvested, fewer actual yield samples would be included in the estimate and hence, less reliability in the figures.  Normally, such an argument would try and maintain that the later yield would become larger as that is when longer season varieties would be harvested but this year a number of people are proposing just the opposite.  Not only was there a larger than normal delay in planting in many areas, but these acres also were in the filling stage at a time when the weather was not as conducive, which in turn is leading to lower yields.  It was pointed out that the last time the harvest pace was off by this much was 2014 and that year, between the October estimate and the final number, the corn yield was reduced by just over 3 bpa.  Indeed, I have already heard such reports from a number of producers, and while we know this is only conjectured at this time, it is at least one more element that should keep the bears just a bit unsettled.  As I noted yesterday, while the corn report was not bullish per se, (outside of the lower global ending stocks) neither was it bearish, and the bear needed reinforcement to maintain their stance. Lacking that, it would appear they have little incentive left to hang around.  I should point out that the bean numbers that were issued yesterday did not reveal anything shocking or at least anything that had not been presented earlier this year but combined with the potential for reduced yields on forthcoming reports, the dry weather concerns in Brazil and of course the ongoing continued solid demand from China, the holdout bears apparently decided it was time to get out of Dodge before the sheriff ran them out.  Note that during the month of September, China imported 8.1 MMT of beans, which was down from the record 10 million they took in July but still exceeded estimates.  The number was nearly 13% above last year and 14% above trade expectation.  For the marketing year (Oct to Sept) China imported 93.5 MMT of beans compared with 83.2 for the same period in the prior year, which itself was a record.

If we were to close out the week right now, November bean would be up 22-cents and would have posted one of the largest weekly gains since summer as well as the highest weekly close since late July. December corn sounds less impressive as we would be close to unchanged but encouraging nevertheless as we bounced from the lowest mark traded since last fall, and December wheat comes in as the lager, down 13-cents but back at a level of major support with little fresh news to take us lower.