Market Analysis
The USDA stunned the market when their November corn production update was above the trade’s range of expectations by 119 million bushel and 248 million over a wire service’s average at 14.578 billion bu. This month’s soybean revision was also higher than expected, but only by 17 million bu. November’s crop level was actually 5.3 million less than last month at 4.425 billion bu.
In corn, this month’s highly unusual 298 million bu. late season jump in output remains a bit of head scratchier when the US yield was increased by 3.6 bu. to a new national record of 175.4 bu. A cool August and a late freeze extending the growing season seemed to offset extended periods of dryness across the central US in 2017. These are the best explanations along with seed technology for the ECB average yield being up 4.6 bu. and the WCB increasing by 3 bu. IA, IL & MN 6 bu. advances along with IN & ND 8 bu. yield jumps so late in the crop year remain surprising. Countering these higher supplies, the USDA upped their feed and export demand outlooks by 75 million bu. each. This sliced corn’s stocks increase to only 147 million and 2.487 billion bu. level.
In soybeans, the US average yield was down 0.06 bu. to 49.46 bu. This year’s late-season dryness into September seems to be the primary reason for this month’s limited yield change. Only IL (+1) and NE (+2) had higher yields out the top 6 states with IA, MN, IN and MO being unchanged. Overall, this month’s 5.3 million bu. smaller crop decreased this oilseed’s ending stocks to 425 million with no adjustments being made in US soybean crush or export demand outlooks.
Despite no US wheat output change this month after the Small Grains Report on Sept. 29, the USDA did up this grain’s export outlook by 25 million bu. to 1.0 billion. This dipped this food grain’s ending stock to 935 million bu. this week prompting stability in this market today.
