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USDA/WASDE Data Seen as Market Bearish

Corn, soybean markets trim losses, close lower.

DES MOINES, Iowa — The U.S. corn and soybean crops are getting bigger as stocks get larger, according to USDA.

As a result, the CME Group’s farm markets closed weaker.

At the close, the Dec. corn futures finished 6¢ lower at $3.51 1/2, while March futures finished 6¢ lower at $3.63.

Nov. soybean futures finished 9 1/2¢ lower at $9.50 1/2, Jan. soybean futures ended 9 1/4¢ lower $9.60 3/4.

September wheat futures finished 7 1/4¢ higher at $4.42.

Dec. soy meal futures closed $3.60 per short ton lower at $300.00. Dec. soy oil futures closed $0.04 lower at 35.19¢ per pound. 

In the outside markets, the Brent crude oil market is $0.17 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 52 points higher.

Matt Pierce, Futures International LLC director of commodity consulting, says the report is definitely bearish.

“This report is brutally bearish, once again. Yield shock going against the average guess, yet again. It’s like the USDA sees the average guesses then does the complete opposite. The USDA followed the historical trend of well above the average guess. So, seven of the last 10 years, the USDA yields were above the average guess in corn and beans,” Pierce says.


In its September Supply/Demand and Crop Production Reports Tuesday, the USDA pegged the U.S. corn average yield at 169.9 bushels per acre vs. the average trade estimate of 168 bushels per acre and last month’s estimate of 169.5 bushels per acre.

For soybeans, the average yield estimate is 49.9 bushels per acre vs. the average trade estimate of 48.8 bushels per acre and the USDA’s August estimate of 49.4.


U.S. Ending Stocks 2017-18

The USDA pegged U.S. 2017-18 corn stocks at 2.335 billion bushels compared with the average trade estimate of 2.18 billion bushels and the USDA’s previous estimate of 2.27 billion.

For soybeans, the U.S. ending stocks are pegged at 475 million bushels, compared with the average analysts estimate of 442 million bushels and the USDA’s August estimate of 475 million.

The U.S. wheat ending stocks were estimated at 933 million bushels vs. the average trade estimate of 920 million and the USDA’s previous estimate of 933 million.


Trade Response

Brian A. Rydlund, CHS Hedging market analyst, says it is another USDA shocker.                 

“I guess I am surprised by the soybean yield, but not the corn yield. The trade had been moving toward the USDA August corn estimates since the August report broke, slowly and reluctantly,” Rydlund says. The bean yield is more of a head-scratcher based on August weather in parts of the Corn Belt.  

There were no stunning changes to the soybean supply/demand numbers, Rydlund says.

“In the corn supply/demand numbers, exports were pushed up 70 million bushels, with ethanol use down 15 million bushels. So, carryout a little tighter but plenty high at 2.35 billion bushels. With next year’s ending stocks estimated at 2.335 billion bushels, we got plenty if USDA is right,” Rydland says.

Redland adds, “Now we watch actual harvest yields pour in and see what the October USDA report bears out.”  



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