USA corn production up, soybean down from October

Ivan Schwartz
November 12, 2017

Ahead of Thursday's USDA World Agricultural Supply and Demand Estimates (WASDE) report, a group of industry analysts predicted the agency would move US corn yields to 172.4 bpa, up from its estimate of 171.8 bpa in October. Soybean production was forecast at a record 4.425 billion bushels, down just 6 million bushels from 4.431 billion bushels in October but up 129 million bushels, or 3%, from 4.296 billion bushels past year.

Nationally, the average corn yield is forecast at just over 175 bushels per acre, which would be a new all-time high.

The number of acres expected to be harvested this year remained the same as last month's USDA forecast, standing at 1.27 million acres.

Chicago Board of Trade (CBOT) grains closed higher on Friday with corn and soybeans bouncing from previous lows triggered by raised yield estimates.

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As for soybeans, the USDA data released on Thursday were not as bullish as the trade had expected, as the yield was left unchanged and stocks were only lowered 5 million bushels. The agency's revised global stock forecasts for 2017-18 of 267.53 million metric tons were a record.

"It's a major surprise for the trade to see a production increase this large for corn", said Brian Hoops, Midwest Market Solutions, during the MGEX crop commentary call. "USDA also increased its forecast of Brazilian production, though it's still too early to be making real judgements there". That would be the most acres harvested in the state since 2011, when Colorado farmers harvested 1.3 million acres.

Today's close will say a lot about the tone of the soybean market, Knorr adds. It might take years for world wheat stocks to decrease significantly.

Still, the January soybean contracts are above the 200-day, 100-day and 50-day moving averages, which will provide support to the market. The projected average farm price for 2017/18 held steady at $4.40 to $4.80 per bushel.

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