Grains are trading mostly higher after the USDA’s December Supply and Demand Reports.
Matt Bennett with AgMarket.Net says the agency shocked the market by lowering ending stocks on corn 200 million bu. to 1.738 billion bu. with an increase in demand.
The agency raised corn for ethanol use by 50 million bu. to 5.5 billion and raised exports by 150 million bu. to 2.5 billion.
It was surprising that USDA was this aggressive considering all the speculation that recent export demand was front loaded due to tariff concerns and may shut off when the Trump Administration takes office.
South American production was left unchanged from last month, but world ending stocks were also lowered by 7.7 MMT to 296.4 MMT.
However, Bennett says the market had rallied going into the report and so the response was positive but somewhat muted.
Soybean ending stocks were left unchanged from November at 470 million bu.
USDA confirmed a record crop in South America, raising Argentina soybean production by 1 MMT to 52 MMT, but leaving Brazil production unchanged at 169 MMT.
Bennett says that’s actually positive because some private forecasts are in the mid-170s for Brazil.
He says with the record crop in the Southern Hemisphere and upcoming tariff concerns it may be a gift that the soybean market is around $10.
Wheat ending stocks were lowered 20 million bu, to 795 million bu.
Global wheat stocks were raised .3 MMT to 257.9 MMT.
