Neutral numbers for Oct. 9

By Doug Tenney, Leist Mercantile

Will the bullish surprise of September 30 be matched with another bullish report today? There was a quick spike higher on soybeans with ending stocks down, but the yield is unchanged. The spike to 29 cents higher for soybeans quickly disappeared as traders realized the yield was unchanged.

That September report was a game changer as it erased months of negative moods for grain prices. Price activity that September day was unprecedented, closing prices had corn up 14 cents, soybeans up 30 cents, and wheat up 28 cents.

USDA projects the US corn yield at 178.4 bushels with the U.S. soybean yield at 51.9 bushels. Corn ending stocks were 2.167 billion bushels, down 336 million bushels. Soybean ending stocks were 290 million bushels, a decline of 170 million bushels. Grain imports into China has soybean imports of 100 million tons, up 1 million tons with corn imports of 7 million tons, unchanged.

Grain news this morning had China buying U.S. corn for April delivery. In addition, China could be buying U.S soybeans for February delivery.

Shortly after the report was released, corn was 3 cents, soybeans 12 cents, and wheat down 5 cents. Just before the report release, corn was up 5 cents, soybeans up 15 cents, and wheat up 5 cents.  

Going into this report, traders were looking for the potential of price action to be very volatile following the noon release. Key numbers to watch today included the U.S. corn and soybean yields as well as the U.S. corn and soybean ending stocks.

Ohio’s soybean harvest has picked up dramatic steam this week. Numerous Ohio producers have expressed disappointment this past week with corn moisture in unharvested fields higher than anticipated. Those hot two weeks in September did not push corn maturity to expected levels. Bottom line, propane and natural gas usage in dryers this fall could easily be significantly higher than seen in the past few years.

Trader estimates had expected the U.S. corn yield to be 177.7 bushels per acre, last month it was 178.5 bushels. They had expected the U.S. soybean yield to be 51.6 bushels per acre, last month it was 51.9 bushels. Last month USDA had soybean imports into China at 99 million tons while corn imports into China were 7 million tons. Both corn and soybean imports into China should be growing larger in coming months.

Brazil planting delays for soybeans likely reduces the ability for Brazil to match the previous year’s January shipments of soybeans into China. Brazil normally ships 6.5-8.0 million tons of soybeans into China during January. Those delays could easily push more soybeans to be imported into China from the U.S. Earlier this week, the U.S. sold 8 cargoes of soybeans to arrive in China during the December-January time slot.

Expect South America weather and the close today to be important benchmarks for grains in coming weeks.

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