Grain futures weathered through another disappointing report day.
The U.S. Department of Agriculture (USDA) today released its monthly World Agricultural Supply and Demand Estimates (WASDE). The report provided yield estimates for the 2018 crop, as well as world ending stocks. Zaner Group market strategist Brian Grossman says the national soybean yield soared above analyst expectations, brining soy stocks down tremendously following the report’s release.
“Soybeans currently trading down 33-cents, with aa massive 51.6 national average yield. That ultimately shakes out to a 785-million bushel ending stock projection. That is well above the former 574-million bushel record,” Grossman said. “Soybeans under significant pressure, soymeal as well…down about nine-dollars right now. We are doing some chart damage.”
The Department of Agriculture also increased the national corn yield, coming in at 178.4 bushels per acre (bpa). Ending stocks came in at 1.684 million bushels, slightly above the trade estimate of 1.63 million bushels. Grossman tells growers not to get hung up on this month’s yield projections.
“The next WASDE report, they will be taking a different approach when they go out and survey fields,” Grossman said. “This report here, they were doing plant count and stand count, not taking into consideration ear weight. So don’t get too wrapped up on this yield number.”
Grossman says producers can expect to see support added back into the market once USDA starts to adjust yield lower.
“We had a pretty good rally, so there definitely is bearish bias and there’s likely profit taking going on. If we see that number scaling back, I do think that we’ll find some support back in this market,” Grossman said. “The wild card, as always, is China.”