USDA’s November Crop Production Report delivered the last chance to adjust the supply-side of balance sheets for corn and soybeans this year. The next chance comes in the January Annual Production Summary.
That means the December Supply and Demand Report will include a:
- National average corn yield of 183.1 bu. per acre on 82.7 million harvested acres for a crop of 15.143 billion bushels.
- National average soybean yield of 51.7 bu. per acre on 86.3 million harvested acres for a crop of 4.461 billion bushels.
There is evidence the supply-side of the 2024/25 balance sheets for corn and soybeans is still a moving target. The corn yield was down 0.7 bu. from October, and the soybean yield dropped 1.4 bu. per acre from the month prior. Both suggest there is some work to do before USDA settles on total supplies for the 2024/25 marketing year. That means there is potential for more market volatility ahead of the mid-January Annual Production Summary and Quarterly Grain Stocks Reports. With the supply trend down month-to-month, the risk of crop cuts could provide selling opportunities for both markets leading up to those reports.
Demand Questions
USDA cut 60 million bushels from corn production between October and November and made no change to the demand-side of the balance sheet. That means carryover was cut 60 million bushels from October.
Some expected USDA to increase estimated exports to reflect solid demand for U.S. corn ahead of the elections. Others expected USDA to increase estimated feed and residual use to reflect heavy hog and cattle weights. Neither happened, but that’s another potential change traders will watch for in upcoming reports.
Corn was left with a carryover estimate of 1.938 billion bushels and a stocks-to-use ratio of 12.9%. That’s not a weight on corn prices, but it’s also not tight enough to lift prices without crop concerns from South America or more demand for U.S. supplies.
USDA cut 120 million bushels from soybean production from October to November and cut use 40 million bushels with estimated exports down 25 million from a month earlier and estimated crush down 15 million bushels. The net result was an 80-million-bushel cut to estimated soybean carryover. Now that’s a bullish headline.
However, carryover is still estimated at 470 million bushels with a 10.8% stocks-to-use ratio. That’s a big enough cushion to absorb some lost bushels from South America and a slightly bigger U.S. demand base without pushing prices higher. It’s also big enough that if Brazil and Argentina escape crop issues this winter, the U.S. soybean market will likely be forced to search for more demand ahead of 2025 plantings.
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