MarketsFarm — There were marked increases in yields for U.S. corn and soybeans that bested market expectations in the supply and demand report from the U.S. Department of Agriculture (USDA).
Despite those increases, corn and soybean futures on the Chicago Board of Trade (CBOT) didn’t react as anticipated.
“We’re getting a friendly reaction to bearish numbers,” Greg McBride of Allendale Inc. at McHenry, Ill. said. “It definitely gave us a little bit of bounce after the report came out.”
In its world agricultural supply and demand estimates (WASDE) released Wednesday, USDA pegged the country’s corn yields to rise by three bushels per acre to a record 181.5 bu./ac. A good chunk of the increase is to come from record yields in Minnesota and South Dakota, as well as higher yields in Illinois, Indiana, Iowa, Missouri, Nebraska and Ohio.
Soybean yields are to increase from 49.8 bu./ac. in the July report to 53.3. The average market projection was yields to rise to 51.2 bu./ac. Meanwhile all wheat yields nudged up 0.4 bu./ac. to 50.1, virtually same as the average trade guess.
For corn production, this means an increase of 1.85 per cent from USDA’s July estimates to 15.278 billion bushels, on the same 92 million planted acres called for last month. Exports are projected to rise almost 3.5 per cent to 2.225 billion bushels. The carryout is expected to jump by nearly 4.1 per cent to 2.756 billion bushels.
The latest WASDE also maintained soybean planted acres at 83.8 million with production rising just over seven per cent from July to 4.425 billion bushels. Bean exports are forecast to increase 3.66 per cent. The carryout is set to leap 43.53 per cent, from 425 million bushels in the July estimates to August’s call for 610 million.
Wheat production is to bump up by slightly more than one per cent from July to 1.84 billion bushels due to increases in hard red spring wheat and durum. Exports are to rise also by a little more than one per cent to 2.086 billion bushels. USDA has called for a 1.8 per cent decline in the all wheat carryout of 925 million bushels.
“You got increased demand for feed for both soybeans and corn that’s starting to get everybody a little bit excited. Maybe this Chinese demand is going to continue to grow and follow through on that Phase One deal,” McBride said.
“There’s still pressure that could come into this market as we start to digest these numbers,” he cautioned, adding this could be a good time for producers to sell.
USDA noted the report didn’t account for recent damage from derecho winds that damaged crops in Illinois and Iowa.
— Glen Hallick reports for MarketsFarm from Winnipeg.