Louise Gartner: Bullish S & D wheat numbers
It’s been a very long time since USDA gave us the kind of across-the-board bullish numbers in a report like those that we got on Friday. The numbers were eye-popping and any hint that corn supplies were plentiful, as suggested by the stocks report just a week earlier, were erased. Again, corn was clearly the leader of the grain complex, but soybeans and wheat weren’t going to be left behind; not to mention they had their own bullish numbers to support them as well.
In the biggest shocker of all, USDA projected that corn yields would only be 155.8 bu/acre, much below even the lowest trade estimate. Even with a 300,000 acre increase in plantings, total corn production will only amount to 12.664 billion bushels. And even though this will still be the third largest crop on record, coupled with a 300 million bushel increase in old crop stocks reported last week, total corn supplies still fall woefully short of demand projections for this year, and ending stocks are forecast to drop to just 902 million bushels, the smallest carryout in 14 years. USDA has raised their expected yearly average corn price a whopping $1.30 in just the last two months.
For wheat, the numbers were pretty much in line with the small grain summary on Sep 30. They lowered total production by 41 million bushels to 2.224 billion, increases feed use by 10 million to 180 million, and lowered ending stocks by 49 million to 853 million bushels, still a comfortable number. Most of the world’s adjustments came from the US changes, with total world production lowered 1.5 MMT to 641 MMT, with ending stocks at 174 MMT, down 3 MMT.
In soybeans, USDA lowered planted acres by 1.2 million and lowered yields .3 bu/acre to 44.4. This took total production estimates to 3.408 billion bushels, down 75 million from last month’s estimate. The trade was actually looking for an increase in bean production. Soybean ending stocks now stand at 265 million bushels, down 85 from last month’s hefty 350 million.
Of course, traders had time to regroup before the markets opened for the day session, and most thought corn would open limit up on the open with beans and wheat close behind. But all grains opened limit up and while wheat traded somewhat off the limits during the day, corn and beans remained locked all session and the pool of buy orders just grew throughout the day.