3 Big Things Today, October 13
1. Soybean Futures Extend Rally in Chicago Overnight After WASDE Surprises
Soybeans were slightly higher while corn was little changed as investors soak in data from yesterday’s World Agricultural Supply and Demand Estimates (WASDE) Report.
The WASDE Report had a few surprises including higher-than-expected yield expectations for corn and lower-than-forecast stockpiles projections for soybeans.
The report was bullish for soybeans, which added almost 27¢ on Thursday. It was more neutral for corn, which was up only 3¢ at the close yesterday. Wheat, which closed down at Thursday’s close, was also little changed overnight.
Along with the unexpectedly low inventories outlook, the USDA lowered its yield forecast for soybeans.
Still, price gains were limited overnight, especially for corn, as traders continue to watch positive yields roll in, this time from Iowa.
Yields in the state, the biggest producer of corn in the U.S., were reportedly better than expected by several farmers despite delayed planting in some areas and extremely dry weather in several south-central counties.
Soybean yield reports were more variable, however, as some growers are seeing worse-than-normal yields while others are topping expectations.
Soybean futures for November delivery rose 3¾¢ to $9.95¾ a bushel overnight on the Chicago Board of Trade. Soy meal added 20¢ to $326.50 a short ton, and soy oil increased 0.41¢ to 33.69¢ a pound.
Corn futures for December delivery were unchanged at $3.49 a bushel overnight.
Wheat for December delivery rose ¾¢ to $4.31¼ a bushel in Chicago. Kansas City gained a penny to $4.27¼ a bushel.
2. WASDE Shocks Soybean Markets With Lower-Than-Expected Yield, Ending Stockpiles
It’s always best to expect the unexpected from the USDA, especially when it comes to its monthly Supply and Demand Report.
October’s WASDE Report was no exception, as the USDA increased its corn yield forecast beyond expectations while lowering its soybean inventories outlook more than projected.
The government pegged corn yields at 171.8 bushels an acre, up from 169.9 bushels a month earlier and well beyond forecasts for 169.8 bushels.
The USDA’s soybean yield outlook, meanwhile, was unexpectedly lowered to 49.5 bushels an acre from 49.9 bushels a month. Analysts had expected the USDA to leave its yield outlook unchanged.
Soybean stockpiles at the end of the marketing year on August 31, 2018, were pegged at 430 million bushels, well below the average estimate of 452 million and the prior month’s 475 million.
The combination of lower-than-expected yield projections and ending stocks pushed prices higher yesterday.
Corn inventories, meanwhile, were projected at 2.34 billion bushels, topping the average trade estimate of 2.25 billion bushels, and was slightly higher than the month-ago outlook.
Wheat stockpiles were estimated at 960 million bushels, easily topping the average analyst estimate of 944 million and the prior forecast for 933 million bushels.
3. Storms Spark Up Over Much of Midwest Starting Tonight, Will Last Through Weekend
Thunderstorms are expected to fire back up tonight in much of southern Wisconsin, northern Illinois, and northern Indiana, according to the National Weather Service.
While severe weather isn’t expected, the storms will bring locally heavy rainfall, the NWS said, which may keep growers out of fields for the weekend.
“A strong cold front will shift across the area Saturday night, resulting in another period of showers and storms,” the NWS said in a report early Friday. “These storms Saturday night will be capable of producing damaging wind gusts in excess of 60 mph across portions of northern Illinois. Very heavy rainfall will also be possible with these storms, and this could result in rapid rises and possible flooding on area streams and rivers.”
Isolated thunderstorms are forecast for parts of eastern Nebraska and western Iowa starting late this afternoon.
Some hail is possible with the storm, and locally heavy rains are expected as the storms stretch into Saturday and Sunday, the NWS said.