The soybean market scored a victory in the October WASDE and Crop Production Report as USDA lowered yield .5 bushels, production by 42 million bushels and even with a drop in exports by 35 million they left ending stocks unchanged at 220 million bushels. The trade was expecting an increase after the higher quarterly stocks on September 30. The trade is also anticipating lower yield moving forward. However, the bullish surprise was global ending stocks were cut 3.6 million metric tons.
Jim McCormick with AgMarket.Net, says, “The yield was lower than traders anticipated, ending stocks are lower than anticipated. And you’re right the world number I think is the biggest surprise to see that big of a drop revision growth number. I think definitely got the trades attention. Coming into this report there was talk that the funds are actually short beans, this report may be enough to scare them right back into a little bit of a net long position.”
On corn USDA again cut yield .8 bushels and dropped production 70 million bushels. Again, USDA cut demand but in the end, they lowered ending stocks 110 million bushels due to the lower carry in from the quarterly stocks. And just like on beans the trade is expecting further yield cuts. While that’s positive, McCormick says a carryover above 2.1 billion is still a headwind.
“When they get a little bit smaller in October, the history does work in the favor that the crop will be a little bit smaller down the line in November then again in January, but unfortunately unless we see an uptick in exports, there’s a very, there’s a very good likelihood that they will offset maybe some of that production losses anticipated down the line with demand cuts. So, the balance sheet overall, Michelle, I’d say it’s going to stay relatively cumbersome around this 2.1, 2.15 carryout number.”
The WASDE was bearish for wheat with the 55 million bushel increase in U.S. ending stocks and USDA only lowered global stocks a half million metric tons.
