Bearish corn, bullish soybean numbers Sept. 10

By Doug Tenney, Leist Mercantile

In the days leading up to this USDA report day, traders were looking for both corn and soybean yields to increase from the August report. In addition, U.S. corn acres were expected to be up one million acres and U.S. soybean acres near unchanged.

This report was to include FSA acres into the mix of publishing supply and demand tables for corn, soybeans, and wheat. In the past, it was very common to have those FSA acres released after the October WASDE report. It is a rare event to see the FSA acres released in September. The FSA acres are supposed to be released AFTER the WASDE report. For whatever reason, however it happened, someone hit send on Wednesday afternoon this week, releasing those FSA acre numbers. 

After the noon report was released, corn was up 2 cents, soybeans up 12 cents, and wheat down 3 cents. Just before the report, corn was down 1 cent, soybeans up 1 cent, and wheat down 8 cents. 

The U.S. corn yield today was 176.3 bushels per acre and the U.S. soybean yield was 50.6 bushels per acre. The average trade estimate for the U.S. corn yield was 175.8 bushels while the trade estimate for the U.S. soybean yield was 50.4 bushels. USDA last month had the U.S. corn yield at 174.6 bushels and the U.S. soybean yield was 50.0 bushels.  

Corn production was 14.996 billion bushels, last month, 14.750 billion bushels. U.S. soybean production was 4.374 billion bushels, last month, 4.339 billion bushels.

U.S. planted corn acres were 93.3 million acres, last month was 92.7 million acres. U.S. soybean acres were 87.2 million acres, last month was 87.6 million acres.

U.S. corn ending stocks for 2021-2022 were 1.408 billion bushels, last month, 1.242 billion bushels. U.S. soybean ending stocks were 185 million bushels, last month, 155 million bushels. Wheat ending stocks were 615 million bushels, last month, 627 million bushels. 

U.S. corn and U.S. soybean 2020-21 ending stocks were expected to move slightly higher due to exports from those two commodities expected to be lower than previous USDA projections. 

What a month it has been since the last USDA report on Aug. 12. We have seen a bullish report stall out, only to see prices moving lower. Just before Hurricane Ida reached landfall, December CBOT corn on Aug. 27 closed at $5.53 ¾, yet closing last night at $5.10. November CBOT soybeans on that August date closed at $13.23 ¼, and closing last night at $12.70 ½. Hurricane Ida damaged Gulf export facilities with exports from that region suddenly dropping to zero overnight. Three facilities have seen electricity restored and could be loading grain on ships in the coming 10 days. 

The August report was bullish for corn with the yield lower than trade expectations. Unfortunately, that bullish momentum was short lived. December CBOT corn that day closed at $5.73 ¼, up 14 cents. At one point in the minutes following the noon report, December corn was up 35 cents. The higher prices were met with heavy producer selling taking place. November CBOT soybeans were also higher that day, but just up 1 cent at $13.41 on the close that day. In the first 30 minutes following the noon report, November soybeans were up 29 ½ cents.  

It may seem a little odd to reminisce about history of just a month ago at this particular time. However, it only adds strength to the reality of needing to recognize the price volatility, price extremes, and the speed at which grain prices have moved both up and down in the past year. In addition, it is most important to remember that USDA monthly WASDE Reports are both critical and violent. The August report was only the precursor to violent price activity this past month.

During the past two week we continue to hear a very common thread: U.S. grain exports are not expected to be moving sharply lower. Instead, grain exports are simply being delayed and pushed to later shipping dates.

Many are expecting the U.S. fall harvest to begin in earnest 1-2 weeks earlier than normal. Some central Ohio facilities are offering half drying for corn delivered by Sept. 20. In addition, we have seen quick shipment basis levels at 70 cents to $1.40 over the December CBOT corn contract. 

Continue to expect volatile price action in the months ahead. Midwest weather for the next two weeks is both warm and dry. Freeze concerns in the next two weeks are near zero. 

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