The bullish surprise in the October WASDE was USDA dropping soybean yield below 50 bu. per acre and leaving ending stocks unchanged from last month at 200 million bushels. Corn production was also down 49 million and ending stocks down to 1.172 billion, but both were above expectations.
Market analysts say while the normal trend moving forward is for USDA to keep lowering production for corn and soybeans, they might also continue to cut demand.
Brian Splitt, AgMarket.Net, says: “USDA cut the export demand for corn by 125 million bushels and for ethanol by 50 million bushels. We saw a change in the soybean export demand by 40 million bushels. That’s going to be the theme right now — seeing revisions lower in the crop but also in the demand side of the balance sheet.”
Splitt doesn’t anticipate corn or soybean ending stocks dropping like they did during the 2012 drought. “I don’t know that we’re going to see a sub-billion carryout again, just like I don’t think we’ll see a soybean carryout drop to that previous 120 million,” he says.
The cotton numbers were also bearish with production lowered by 20,000 bales, but the trade had expected a 472,000-bale drop, and ending stocks increased by 100,000 bales.
USDA lowered wheat ending stocks, but by only 34 million bushels. That was a above expectations as the agency offset the 133-million-bushel production cut by lowering demand, including a 50 million bushel drop in exports.
