August 11, 2017
Grain Marketing Specialist
CORN: As of 7:45 - Up 1
Yesterday’s USDA report brought to the trade numbers that were definitely taken by surprise, and we ended the day down 15 cents in the nearby Sept contract. The national yield average was lowered from 170.7 to 169.5 bushels per acre. It is a decrease, but it is a lot smaller decrease than the trade needed to sustain a rally. In addition to that, we also saw a 25 million bushel reduction in both the feed usage and exports categories. This leaves our new crop carryout at 2.273 billion bushels, which is 52 million less than last month’s report gave us. The current stocks to use ratio is sitting at 15.9%.
SOYBEANS: As of 7:45 - New Crop Up 6
Soybeans also had a tough day yesterday, closing down 33 cents in the new crop contract. Contrary to what the trade had believed what would happen, USDA increased the national yield average from 48.0 bushels per acre to 49.4. We also saw a 10 million bushel decrease in crush, and were left with 15 million bushels more in ending stocks as compared to last months numbers, going from 460 million bushels to a 475 number. Apparently the USDA didn’t get the dry Illinois and Iowa story that the rest of the trade has been focused on the past few trading sessions. United States soybeans are gaining in competitiveness on the world market as South American farmers lock up their supplies waiting for higher prices.
WHEAT: As of 7:45 - MPLS Up 5, KC Down 3
Wheat spent post-report day following corn and beans lower, along with a reaction to bigger production in foreign countries. If there is an upside to the major drop in prices yesterday, it is that US exports should benefit by making us more competitive on the foreign market. Yield across the US was dropped from 46.2 to 45.6 bushels per acre, and production was dropped 21 million bushels. However, this only reduced ending stocks by 5 million bushels and we are still sitting on a lot of wheat, with a 43.6% stocks to use ratio. However, the world is still looking for protein, with countries such as Canada and Germany both facing quality issues. On the contrary, France continues to see better protein numbers than predicted, and the US Upper Plains reaped high proteins. Western Minnesota received high yields and an average of 14% protein in their Spring Wheat Crop. Those proteins increased the further west harvest progressed, where the drought was much more significant.