USDA data shows smaller corn crops, tighter ending stocks

U.S. corn exports raised by 325 million bushels.

The U.S. is leaking corn and soybeans, as ending stocks tighten, according to the USDA.

On Tuesday, the USDA released its November Supply/Demand Report.

At the close, the Dec. corn futures finished 15 1/4¢ higher at $4.23. March corn futures ended 15 1/2¢ higher at $4.31. 

January soybean futures closed 35 3/4¢ higher at $11.46 1/4. March soybean futures closed 35 1/2¢ higher at $11.44.

Dec. wheat futures closed 11¢ higher at $6.08 1/2. 

Dec. soymeal futures settled $10.70 per short ton higher at $394.80.

Dec. soy oil futures closed 0.58 cent higher at 36.06¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.10 per barrel higher (2.73%) at $41.39. The U.S. dollar is higher, and the Dow Jones Industrials are 241 points higher (+ 0.83%) at 29,399 points.

2020/21 U.S. Ending Stocks

For corn, the USDA pegged the U.S. 2020/21 ending stocks at 1.702 billion bushels vs. the trade’s estimate of 2.03 billion and the USDA’s October estimate of 2.167 billion.

For soybeans, the USDA sees the U.S. 2020/21 ending stocks at 190 million bushels vs. the trade’s expectation of 235 million bushels and the USDA’s October estimate of 290 million.

For wheat, the USDA pegged ending stocks at 877 million bushels vs. the trade’s estimate of 881 million and the USDA’s estimate last month of 883 million bushels.

2020/21 Crop Production

In its report Tuesday, the USDA pegged the U.S. crop size at 14.50 million bushels vs. the trade’s expectation of 14.65 million bushels and the USDA’s October estimate of 14.72 million.

On yield, the USDA sees the U.S. raising a corn crop at an average yield of 175.8 bushels per acre vs. the trade’s expectation of 177.7 bu./acre and the USDA’s October estimate of 178.4 bu./acre.

For soybeans, the USDA sees this year’s crop totaling 4.17 billion bushels vs. the avg. trade estimate of 4.25 billion and the USDA’s October estimate of 4.26 billion.

Regarding yield, the USDA sees the U.S. farmers averaging 50.7 bu./acre vs. the trade’s estimate of 51.6 bu./acre and the USDA’s October estimate of 51.9.

Trade Reaction

Sal Gilbertie, Teucrium Trading, says that today’s report, overall, is another market-friendly report.

“Today’s WASDE makes for two reports in a row that are supportive for the grain complex, particularly for corn and soybeans. Corn and bean domestic usage is at record levels and ending inventories are headed toward lows not seen in several years. This sets the stage for an acreage fight between beans and corn, which will be determined by futures price movements,” Gilbertie says.

Britt O’Connell, cash Adviser, ever.ag, says that today’s report could push soybeans to even higher price levels.

“Corn and soybean bulls have found renewed reasons to push markets higher. The USDA came in today and shocked the market by lowering corn and soybean yield to 175.8 bpa and 50.7 bpa respectively,” O’Connell says.  

She added, “As a natural result, ending stocks were also lowered with corn projected at 1.702 billion bushels – this is the lowest ending stocks we’ve seen in the corn market since 2014 and 2015.  That year the USDA’s average corn price for the year was published at $3.60-3.70. Soybean ending stocks projections likewise mirror those we experienced back in 2014 and 2015.”

With Brazil now slightly ahead of its traditional five-year planting pace, the funds and others will be closely monitoring yield expectations, she says.  

“With the cupboards bare in SA, the U.S. is the only game in town until harvest come Jan/Feb on soybeans. Traditionally, China is winding down on U.S. purchases, but it is 2020, so all things are possible,” O’Connell says.
 
O’Connell added, “It’s interesting that carry is starting to build back into the corn market. The soybean contracts are building some carry month to month as well and will likely play it that way for the foreseeable future.” 

Jason Roose, U.S. Commodities, says that the report was no eye opener.

“No surprises in today’s November WASDE crop report if you are in production agriculture. Yields and ending stocks were sharply reduced in corn and soybeans, sending soybeans to contract highs. Lowering production in soybeans and the increased exports in corn were the key elements in the drop in ending stocks. The investors’ focus will shift to South America weather in next few weeks,” Roose says. 

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