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3 Big Things Today, September 13

Soybeans Rise in Overnight Trading; Trade Looks at WASDE With Skeptical Eye.

1. Soybeans Rise Overnight as Investors Skeptical of USDA Report

Soybeans and wheat were slightly higher while corn was unchanged in overnight trading after what many considered a bearish report from the USDA.

The USDA, in its World Agricultural Supply and Demand Estimates Report, yesterday pegged corn and soybean yields both higher than expected.

Producers, analysts, and traders, however, said after the report that they’re skeptical of the numbers because of the difficulties they saw during the growing season including dry weather in some areas and overly wet weather in others.  

That’s left traders uncertain as to which way to bet on prices.

Soybean futures for November delivery gained 5¢ to $9.55½ a bushel overnight on the Chicago Board of Trade. Soy meal rose $2 to $302 a short ton, and soy oil futures added 0.10¢ to 35.29¢ a pound.

Corn for December delivery was unchanged at $3.51½ a bushel.

Wheat for December delivery rose 3¢ to $4.45 a bushel overnight, while Kansas City gained 2½¢ a bushel.

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2. USDA Report Bearish Before Disbelief Sets in Among Market-Watchers

Well that went over like a lead balloon.

It wasn’t widely expected, but the USDA threw everybody for a loop when it released its monthly WASDE Report.

In what most thought would be a nonevent, the government agency that was supposed to lower corn and soybean yields and production ever so slightly instead raised its projections, sending everybody into a tizzy.

In case you missed it, the USDA put corn production at 14.184 billion bushels on yields of 169.9 bushels an acre. That’s up from analyst estimates for 14.035 billion bushels and 168.2 bushels an acre.

Soybean output was pegged at 4.431 billion bushels on yields of 49.9 bushels an acre, topping forecasts for 4.328 billion bushels and 48.8 bushels an acre.

Investors initially said the report was bearish but then began to question its legitimacy. Many analysts took to social media to express their views about the report, some using colorful language, saying that the estimates are off because the USDA didn’t take into account adverse weather.

Admittedly, the agency said in the report that the numbers were tallied before Hurricane Harvey and Hurricane Irma and that it will look again at harvest numbers.

The USDA said it will review corn, bean, cotton, rice, sorghum, sugar cane, and peanut estimates after the hurricanes made data gathering difficult. It remains to be seen if those numbers also disappoint everybody involved in the trade.

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3. Rainfall Expected in Parts of Minnesota Today, Iowa on Friday

Without a hurricane on the weather maps, it is pretty quiet out there on Wednesday morning.

Some rainfall is expected in parts of Minnesota and Wisconsin starting later this afternoon, while in Iowa, some precipitation is expected starting on Friday, according to the National Weather Service.

“There is a chance of thunderstorms across the northern third of Minnesota tonight,” the NWS said in an early morning report.

Storms are not expected to be severe, though they’re likely to linger through Sunday as the front carrying the rain is very slow moving, according to the agency.

The weather system moving through Iowa likely will lead to thunderstorms Friday with some that could produce damaging winds or large hail, the NWS said.

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