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USDA raises corn, soy production estimates

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The United States Department of Agriculture (USDA) on Wednesday released its monthly World Agricultural Supply and Demand Estimates (WASDE).

Grain market traders expected the average soybean yield to increase, but did not expect to see such a significant increase in corn. Zaner Ag Hedge market strategist Brian Grossman provides additional details.

“We were all looking for a big soybean yield, but were comfortable that the corn yield might be pretty close. However, USDA comes out with a 181.3 bushels per acre,” Grossman said. “That’ll be a new record. They did give us a bit of a demand bump in the ethanol category, as well as in exports. Ultimately, ending stocks are 1.774 million bushels, 90 million bushels higher than last month.”

Grossman says he is skeptical of the demand increase, and believes the market is too. He notes December corn futures traded 13 ¾ cents lower at midday (Wednesday). They later ended the day down 14 1/4 cents.

November soybean futures, on the other hand, traded five cents higher and ended the day up 8 1/4 cents. Grossman says the United States’ offer to negotiate with China pushed soybean futures higher against record yields.

“Once again, another new record year,” Grossman said. “Fifty-two-point-eight bushels per acre coming from the USDA. That is up 1.2 bushels from last month, and we did not find much for new demand. Crush went up about 10 million. Ultimately pushing ending stocks to 845 million bushels.”

The previous record set for soybean ending stocks totaled 574 million bushels. Grossman says while soybean futures looked positive following the big report, spreads did not buy in. Grossman encourages producers to look past the numbers and look forward to the future.

“My biggest optimism is – I think, eventually, we will get a trade deal,” Grossman said. “China is not going to want to shoot themselves in the foot for an extended period of time. Now, I could be completely wrong with that; I don’t want to put anything past China. But at the end of the day, they’re just as human as we are.”

To reach Brian Grossman, of Zaner Group, call (312) 277-0119.

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