The Nov. 8 report followed the reality of no report in October due to the two week shutdown. Corn production for the U.S. in 2013 was estimated at 13.989 billion bushels. The nationwide yield was increased to 160.4 bushels per acre. While the yield was above trade expectations, it is not out of line according to many harvest reports. Many producers are indeed seeing fantastic corn yields. Some will see their farm average near or above 200 bushels per acre. In addition, with the increased corn production, ending stocks increased as well. That increase was a much smaller increase than the actual production increase. More importantly it was the second piece in the puzzle regarding all of the corn numbers. First, corn production was below 14 billion bushels. Second, ending stocks were less than two billion bushels. Those have been huge landmarks as traders and producers evaluated the 2013 U.S. corn production.
USDA will not have crop production estimates in December. Don’t be surprised that the final U.S. corn yield in January continues to increase. A well known axiom for grains is that big crops get bigger. Already last month, grain commercials in the U.S. felt the corn yield could be at 164 bushels per acre. For the most part, many Ohio elevators had limited days of not receiving corn or soybeans. However, with the big corn crop, many facilities have had to restrict corn dumping capabilities to dry corn only. This is not a surprise. Some producers reported that drying the wet corn to recommended and safe levels for storage into next spring was taking more fuel than past harvests. Many had expected huge bottlenecks to take place at elevators across the country as corn and soybean harvest neared the 50% level. Helping to eliminate the worst case harvest bottleneck scenarios has been the huge amount of on farm storage bins erected in the past five years. Current estimates place total U.S. on farm storage at 22-23 billion bushels, a big jump from the 12 billion bushels in 2008.
Look for the final 2013 corn production and yield to increase with the January 2014 report. That will be the final production estimates for 2013. Bear in mind that once the September 30, 2014 quarterly grain stocks report is published, NASS and USDA would revise the 2013 production number if the quarterly grains stocks report is hugely out of proportion to projected ending stocks on August 31, 2014.
It appears that many soybeans moved into the pipeline with this fall’s harvest. With tight U.S. supplies, the soybean complex is foretelling there is no advantage to hold soybeans into the spring or summer. CME soybean prices on Nov. 11, for example are January $13.01, March $12.82, May $12.63, July $12.58. As each CME month is lower than the previous month, cash prices into spring and summer are lower than those for January 2014.
In coming weeks, the trans fat issue is worth monitoring. It has a 60-day comment period with the FDA. FDA is moving towards zero trans fat in processed foods. Any potential ban could affect up to 15% of U.S. soy oil use. Trans fat has already been sharply reduced in restaurant foods. If a ban takes place, it would likely start in 2015.