First and foremost, this morning; Thank you to all the Veterans who have served this nation for the past 244 years.
I had been commenting that the grain and soy bulls had been acting a bit sluggish and were in need of a fresh batch of feed if they were expected to grow any further. Little did I realize, nor did many others for that matter, that the USDA would dump an oversized load of feed into the bunk, which also happened to be loaded with an extra helping of growth steroid to boot. The corn yield was trimmed nearly 1 ½% to 175.8, which, interestingly enough, is still the third-highest on record, and the bean yield was reduced 2.3% to 50.7, which is the second-highest on record. This resulted in corn production being reduced 215 million bushels and beans 98 million. Soybean usage was tweaked higher by a mere 3 million bushels, but corn exports were increased by a massive 325 million bushels to a record 2.65 billion bushels. After a reduction in domestic use, total usage was increased 250 million. The net result was 100 million bushels cut (from the last report) in bean ending stocks to 190 million and a reduction of 465 million in corn to 1.702 billion. If these hold true, it means we are looking at stocks to usage ratio in beans of 4%, and for corn 11%, which for both would be the lowest since the 2013/14 crop year.
While it almost goes without being said, weather and crop production in South America just moved on the importance scale of 1 to 10, from a 9 to 11.
In other ag-related news this morning, in the export arena there is no news as nothing was reported in the daily lineup. It is not that there is no business being conducted, it is just that it is not of sufficient size to report. Weekly export sales will be released tomorrow morning.
Ukraine now reports that harvest of summer crops is 90% complete, which has resulted thus far in 55.3 MMT of grain from 13.8 million hectares. The ag ministry estimates there will be a total crop of 68 MMT. 95% of the winter wheat has been planted.
After a trip down to challenge the lows of the year on Monday, the U.S. Dollar has staged a somewhat surprising rebound. Granted we remain well entrenched within the range this index has been trapped in since late July so there does not appear to be a threat of an extended advance, but seeing that 10-year notes have pushed down to the lowest point (highest yield) since June and 30-year bonds are at the lowest point this year, it is a market worth keeping an eye on.
