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USDA Says Big Crops, Markets End Lower

DES MOINES, Iowa (—The U.S. 2015 corn and soybean crops keep getting bigger, according to the USDA Tuesday. As a result, the CME Group’s corn and soybean markets have turned lower.

At the close, the Dec. corn futures settled 7 3/4 cents lower at $3.59.  Nov. soybean futures closed 9 cents lower at $8.64 1/2.

Dec. wheat futures finished 11 cents lower at $4.90 3/4. 

Dec. soymeal futures ended $2.80 per short ton lower at $292.20. Dec. soyoil futures closed $0.50 lower at $27.27. 

In the outside markets, the Crude oil market is $0.54 higher per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 3 points lower.

On Tuesday, the USDA pegged the U.S. corn crop at 13.654 billion bushels vs. the trade's expectation of 13.55 billion bushels and its October estimate of 13.555 billon bushels.

Also, the USDA estimated the U.S. 2015 corn yield average at 169.3 bushels per acre vs. the trade's estimate of 168 bushels per acre, and higher than its October estimate of 168 bushels per acre. 

U.S. corn harvested acreage was left unchanged at 80.7 million vs. the trade's estimate of 80.7 million.

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For soybeans, the USDA pegged the U.S. 2015 crop size at 3.981 billion bushels vs. the trade's expectations of 3.912 billion bushels, and above its October estimate of 3.88 billion bushels.

USDA estimated the U.S. soybean yield at 48.3 bushels per acre vs. the trade's estimate of 47.5 bushels per acre, and above its October estimate of 47.2 bushels per acre.

Also, the U.S. soybean harvested acreage was left at 82.4 million vs. the trade's expectations of 82.4 million.

U.S. 2015-16 Carryout:

Corn = 1.76 billion bushels, vs. the trade's expectation of 1.587 billion and the USDA's Oct. est. of 1.561 billion.

Soybeans = 465 million bushels, compared with the trade's expectations of 429 mill. and USDA's Oct. 425 mill.

Wheat =  911 million bushels vs. the trade's expectation of 866 mill. and USDA's Oct. 861 million bushels.

Trade Reaction:

-- Corey Bratland, Kluis Commodities: "This report keeps the farmers on the sidelines even longer. Short-term, the basis market may improve."

—- Mike North, President Commodity Risk Management Group, says that large supplies is the best way to describe the newly updated balance sheet.  “Corn yield was raised to 169.3, above the average guess of 167.4 bushels per acre.  Soybean yields jumped to a new all-time record of 48.3 bpa. These production hikes in conjunction with smaller corn usage numbers (ethanol down 75 million bu, exports down 50 mil. bu, feed usage up 25 mil. bu) allowed balance sheets to climb both domestically and globally.  Current projected stocks for the 2015/16 marketing year are 1.76 billion bushels of corn and 465 million bushels of soybeans. Globally, corn supplies rose to 211.91 MMT from 187.8 MMT after accounting for the growth in US production and the reduction in the Chinese usage of corn for feed.  Soybeans parted company here.  Stocks declined by 2.2 MMT on stronger projected Chinese demand.” 

—Pete Meyer, PIRA Energy senior grain analyst, says that the ending stocks numbers, across the board, were higher than expected.  

“In short, it’s all up to the export market to get this market turned around, and with CONAB posting 102M MT in soybean production this morning, to go along with almost 82M MT in corn, the odds are stacked against U.S. exports, especially with the dollar index approaching 100.  Going to be a long, nervous wait for farmers until the January reports.”

—Jacob Burks, Wedbush Futures LLC, says that this bearish report was expected and the USDA didn’t disappoint.  “Corn, soybeans, and wheat all received boost in ending stocks numbers.  I guess the answer is yes, the western Corn Belt can support the losses in the east.”

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