Corn and soybean futures ended the day (Thursday) on a positive note, after the release of the October World Agricultural Supply and Demand Estimates.
AUDIO: Brian Grossman, Zaner Ag Hedge
The U.S. Department of Agriculture (USDA) on Thursday released its World Agricultural Supply and Demand Estimates (WASDE) for October. Zaner Ag Hedge market strategist Brian Grossman says the markets reacted bullishly to the report. He says corn had good reason to be excited.
“Corn has good reason to be excited,” Grossman said. “Ending stocks (went) up 39 million bushels, but keep in mind, we increased the beginning stock more than that, based off the Quarterly Grain Stocks report. Ultimately, we ended up with an unchanged acreage and a yield number coming down .6 bushels. That’s good to see, given the time of year.”
United States corn production saw a 49 million bushel decrease. 2017/2018 global corn production rose 4 million metric tonnes (mmt), with new crop corn growing by 2.3 mmt. Grossman says an increase in global production could slowdown demand.
Soybean futures also reacted bullishly to Thursday’s report. However, the report provided a bearish outlook.
Soybean ending stocks saw a 40 million bushel increase, with acreage falling by 600,000 and yield rising .3%, now at 53.1 bushels per acre. United States soybean production was lowered. Similar to corn production, global ending stocks rose by roughly 2 million metric tonnes.
The key takeaway, “the big picture for soybeans is bearish,” but “this could be a turning point for corn.”
“The soybean reaction is positive, but the big picture for soybeans is still bearish. The market is up, but 885 million bushels is massive, and we’re looking at a record stocks to use ratio with an unchanged demand outlook,” Grossman said. “On the other hand, this could be a turning point for corn. I know a lot of producers have been nervous as what to do with corn, but seeing yield coming down is a good step for what we’re likely going to find here over the next couple of weeks with the amount of weather damage that we’ve had.”