3 Big Things Today, October 13
1. Wheat Futures Rise Overnight After USDA Cuts Production Forecast
Wheat futures were higher overnight after the U.S. Department of Agriculture cut its forecast for production in the current marketing year by 11 million bushels.
Output in the 2016-2017 year that started on June 1 will total 2.31 billion bushels, down from 2.32 billion bushels forecast in September, the USDA said yesterday in a monthly report. Still, inventories were projected higher, offset by lower use.
The USDA raised its export expectations by 25 million bushels but lowered its feed-use outlook by 70 million bushels. Total disappearance is seen at 2.27 billion bushels, down from a prior projection for 2.32 billion bushels.
Wheat futures for December delivery rose 3¼ cents to $4 a bushel on the Chicago Board of Trade, while Kansas City futures added 3¢ to $4.01½ a bushel.
Corn and soybean futures were little changed overnight as investors focus on fundamentals. The storylines for crop prices have been harvest pressure vs. demand. Sales of corn since the start of the marketing year on September 1 are a whopping 87% ahead of last year’s pace while soybean sales are up 30%, according to the government.
Still, prices have been pressured as the harvest rolls on. About 35% of U.S. corn had been collected as of Sunday and 44% of soybeans were harvested, the USDA said in a report earlier this week.
Corn futures for December delivery rose ¾¢ to $3.37¾ a bushel in Chicago.
Soybeans for November delivery lost 3¢ to $9.42½ a bushel. Soy meal futures for December delivery rose 50¢ to $297 a short ton and soy oil fell 0.26¢ to 33.08¢ a pound.
2. USDA Does What Analysts Expected; Carryout Only Surprise in WASDE
For once, the Department of Agriculture did what everybody expected it to do.
There were few surprises in the corn and soybean yield and projections from the USDA’s World Agricultural Supply and Demand Estimates report yesterday. The government pegged corn yield at 173.4 bushels an acre, exactly on par with forecasts from analysts, while output was seen by the USDA at 15.1 billion bushels, also very close to projections.
Soybean yields were seen at 51.4 bushels an acre, also perfectly pegged by analysts. The USDA said production would total 4.27 billion bushels, a tick below private forecasts for 4.28 billion bushels.
If there was a surprise, it came in on the stockpiles side.
The government said corn carryout would total 2.32 billion bushels, slightly below analyst forecasts for 2.36 billion bushels and September’s USDA forecast for 2.38 billion. Soybean stockpiles will come in at 395 million bushels, well below forecasts for 415 million bushels but above last month’s projection for 365 million.
With corn and soybean yield and production all pegged at records, it’s going to be very difficult for prices to rally. It’ll be interesting to see if demand can buoy prices as it’s done since the start of the corn and bean marketing year on September 1.
Get today’s news sent to your inbox by signing up for Successful Farming newsletters.
3. Temperatures Below Freezing in Much of Midwest
Many Iowa counties are under a freeze warning as temperatures dropped well into the 20s overnight, according to the National Weather Service.
Temperatures fell as low as 26°F. overnight in several counties in Iowa and parts of Nebraska, Kansas, Missouri, South Dakota, Minnesota, and Wisconsin, the NWS said in a report on Thursday morning. The freeze warnings are in effect until 9 a.m. Central.
Meanwhile, the remnants of Hurricane Matthew continue to cause problems in the Carolinas, according to the agency.
“Major river flooding (some record) will continue in eastern North Carolina and South Carolina due to last weekend’s heavy rain from now-dissipated Matthew,” the NWS said.
Get involved in the discussion in Marketing Talk.