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136868

USDA Report Pushes Soybeans to 16¢ Lower Close

Corn yield tweaked a bit lower.

The USDA released a huge soybean production number that is pressuring the markets Monday.

At the close, the December corn futures finished 1½¢ lower at $3.39½, and March futures finished 1½¢ lower at $3.50 per bushel.

November soybean futures close 16¢ lower at $9.64½; January soybean futures ended 15½¢ lower at $9.68¾.

December wheat futures closed 5¾¢ higher at $4.09¼.

December soy meal futures closed $4.60 short ton lower at $311.90. December soy oil futures settled 0.73¢ lower at 32.64¢ per pound. 

In the outside markets, the Brent crude oil market is $0.35 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 238 points higher.

Trade Reactions

If realized, the U.S. 2016 corn production would be a record-large 15.093 billion bushels. For soybeans, the 2016 crop size would total 4.201 billion bushels, figuring today’s USDA yield estimate of 50.6 bushels per acre.

Jason Roose, U.S. Commodities in West Des Moines, Iowa, says the report is unfriendly to farm markets.

Jack Scoville, The PRICE Futures Group, senior market analyst, says that the USDA left estimates high and above expectations.  

“The beans were especially big with the above 50 bpa – wow,” Scoville says.  

“The corn must be looking at increased area. Not sure the market completely believes the corn estimate as it is holding pretty well.”

The headline yield estimate for beans, above 50, is creating the selling there as much as anything, Scoville says.  

“These are big numbers, bigger than expected by the trade, and the market is doing what it should do. We will trade these numbers for a while and then start looking for harvest results.  But the backdrop provided today is bearish and will help keep rallies in check for a while.

“As harvest approaches, the USDA increased the soybean ending stocks by 35 million to 365 million. Also, it increased the yield from last month to 50.6 bushels per acre. The corn carryout and yield were lowered slightly from last month’s crop report. The 174.4 bushel per acre on corn would be a record-setting yield.”

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Sal Gilbertie, Teucrium Trading, says that with the lone exception of the slightly higher-than-expected increase in its estimate for soybean production, the USDA seems to be walking a tightrope between its aggressively optimistic numbers last month and the slightly reduced trade expectations that were anticipated for this month.

“The bottom line is that there were no real surprises from this report, and the focus from this point forward will be the progress of the current harvest to see if it lives up to expectations,” Gilbertie says.

He adds, “Both global demand and supply for all grains continue to be robust and at record or near-record all-time highs. Current multiyear low prices as we head into the Northern Hemisphere’s prime harvest time will likely keep demand up, consumers happy, and traders with short positions nervous and edgy.”

It will be interesting to see what farmers do with their crops, if prices remain at current levels through the completion of harvest, Gilbertie says.

 

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