Grains are lower at midday:
Dec Corn – 6 cents/bu (5.27)
Nov Soybeans -21 ¼ cents/bu (12.07)
Dec Chi Wheat + 9 ¾ cents/bu (7.41 ½ )
Cdn $ +0.00240 (80.37 cents)
WTI Crude Oil +0.22/barrel (80.75)
Today, at noon ET, the USDA released their October Crop Report. As expected, the USDA raised USA corn and soybean carryout stock levels, based on the September 30th Quarterly Stocks report data that was released at the beginning of the month. What is most surprising is the fact that the government raised the average soybean yield by almost a full bushel per acre, and raised the average corn yield by 2/10’s of a bushel per acre (when a cut to corn yields was expected by most).
So, domestic corn and soybean carryouts were raised more than expected, but global carryouts were also raised more than expected, with the world bean carryout higher than the highest estimate from the trade. That fact will likely put a ceiling on bean prices in the short term, although, November soybean futures spent all of 30 seconds under $12.00, before value buyers swooped in to buy the weakness.
The good news story from today’s report is wheat, with USA ending stocks lowered by 35 million bushels, but global wheat stocks coming in below the lowest guess from the trade. Wheat went from trading lower on the day going into the report to trading over 10 cents/bu higher shortly after the report release.
Now that the October Crop Report is behind us, analysts will spend the next few days pouring over State by State production forecasts, and various Supply and Demand tables. Ultimately, the focus will turn to demand, and to South American production prospects. Weakness from today’s report was not unexpected in the least. We now need to see confirmation of the USA domestic industrial demand for bean oil, and need to see a resumption of Chinese buying before we can assert that we are close to our harvest lows.