Soybean Prices Find Strength After Friendly USDA Report
The November Crop Production and World Agricultural Supply and Demand Estimates reports gave a lift to grain prices.
The soybean yield is the big story of the day, says Matt Bennett, commodity analyst with AgMarket.net.
Soybean production is forecast at 4.42 billion bushels, down 1% from the previous forecast but up 5% from last year. Based on conditions as of Nov. 1, yields are expected to average 51.2 bu. per harvested acre, down 0.3 bu. from the previous forecast but up 0.2 bu. from 2020.
Let's move to #NASS soybean yields (bigger story of the day)- The national yield came in at 51.2 bu./acre. Down from 51.5 in October. The trade was expecting an increase to 51.9 bu./acre. Currently the SX22 contract is trading up 26 cents on the news. pic.twitter.com/h6qdufWO5D — Ben Brown (@BenBrownMU) November 9, 2021
The trade was expecting an increase to 51.9 bu. per acre.
“When you talk to producers throughout the Corn Belt, many are talking about record yields. So, I didn’t think it was a stretch to get a record crop,” Bennett says.
"Definitely the trade is breathing a bit of a sigh of relief as to this thing getting super carried away..."@chief321 giving a quick post-report analysis on USDA's #WASDE numbers. His full reaction will be posted soon.
We will post a team discussion on the report as well. pic.twitter.com/pKVK2esphJ — AgMarket (@AgMarket_Net) November 9, 2021
Big sigh of relief for markets as #soybean yield falls to 51.2 bushels per acre and #corn "only" goes up to 177.0 bpa. #Corn up 10, #soybeans up 36 #oatt — Arlan Suderman (@ArlanFF101) November 9, 2021
USDA reports the U.S. soybean outlook for 2021/22 includes lower production and exports and higher ending stocks. Lower yields in Indiana, Iowa, Ohio and Kansas account for most of the change in production.
Exports are reduced this month reflecting reduced global imports and lower-than-expected shipments through October. With use falling more than supply, soybean ending stocks increased 20 million bushels.
The U.S. season-average soybean price for 2020/21 is forecast at $12.10 per bushel, down 25¢.
For corn, USDA estimates production at 15.1 billion bushels, up less than 1% from the previous forecast and up 7% from 2020. Based on conditions as of Nov. 1, yields are expected to average 177 bu. per harvested acre, up 0.5 bu. from the previous forecast and up 5.6 bu. from last year.
#NASS Production Recap- Let's start with corn (not the main story today) yields National Average came in at 177 bu./acre up 0.5 bu./acre from Oct and just 0.1 above trade estimates. pic.twitter.com/reI5gwUfWx — Ben Brown (@BenBrownMU) November 9, 2021
The trade was expecting a corn yield of 176.9 bu. per acre.
On the supply and demand front, USDA’s corn outlook calls for greater production, increased corn used for ethanol and marginally lower ending stocks.
Corn used for ethanol was raised 50 million bushels. With use rising slightly more than supply, corn ending stocks are lowered 7 million bushels. The season-average corn price received by producers is unchanged at $5.45 per bushel.
“Ethanol demand went up 50 million bushels, but we were guessing 100 million,” Bennett says. “I think it will go up over 100 million given growing demand.”
