Market News

Soybeans, corn, wheat gain after USDA numbers

Soybeans were higher on commercial and technical buying. The USDA lowered its production guess due to a lower average yield estimate, but domestic ending stocks were unchanged following cuts to exports. The crush projection was up from September. One interesting feature is that pod counts were up on the year in the objective yield states, which with that lower yield, implies lower test weights caused by the dry finish to the growing season. Harvest is ongoing with delays expected in parts of the region this weekend. Globally, the USDA lowered ending stocks because of Brazil and China, and cut production on that smaller U.S. crop guess, also increasing crush demand. The USDA did raise the export guess for Brazil slightly, while leaving South American production unchanged for now. Imports by China were left at 100 million tons. The USDA says unknown destinations bought 295,000 tons of 2023/24 U.S. soybeans, bringing the two-day total for sales to 629,000 tons. The USDA’s weekly sales numbers are out Friday morning. Soybean meal and oil were higher with meal leading the way on commercial demand.

Corn was higher on commercial and technical buying. The USDA lowered its yield, production, and U.S. ending stocks projections, generally in line with pre-report expectations. Ear counts in the USDA’s objective yield states were at record levels, implying lower test weights after the dry end to the growing season for this year’s corn crop. In the supply and demand report, the UDSA did lower its feed and residual use and export estimates. On the global side of the ledger, ending stocks were down following a reduction for the U.S., with production slightly higher following an upgrade for Argentina. The export estimate for Argentina was also up on the month. Guatemala bought 124,545 tons of 2023/24 U.S. corn ahead of the open. The U.S. Energy Information Administration says ethanol production last week averaged 1.004 million barrels a day, down 5,000 on the week, but up 72,000 on the year, while stocks declined 358,000 from last week and 337,000 from last year, hitting a four-week low of 21.526 million barrels. Ethanol exports averaged 120,000 barrels a day, 2,000 less than a week ago.

The wheat complex was higher on fund and technical buying. U.S. ending stocks were larger than expected, but global stocks were down slightly more than what analysts were thinking heading into the report. Global production was down on cuts for Australia, Brazil, and Kazakhstan, with the USDA also cutting exports for those two nations. The numbers don’t reflect trade chatter about increased export demand from China and India. Domestically, the big feature was an increase in feed and residual use, with no change on exports. U.S. winter wheat planting conditions are generally favorable. Any rain related delays in planting are seen as beneficial because of the soil moisture recharge ahead of dormancy. The Rosario Grain Exchange lowered its production outlook for Argentina to 14.3 million tons, due to ongoing dry weather.