Neutral corn but bearish soybeans for Oct. 12

By Doug Tenney, Leist Mercantile

Both corn and soybean yields increased.

After the noon report was released, corn was 6 cents, soybeans down cents, and wheat up 3 cents, Just before the report, grains were all lower, corn  6 cents, soybeans 15 cents, and wheat 4 cents.

The U.S. corn yield today was 176.5 bushels per acre and the U.S. soybean yield was 51.5 bushels per acre. Traders were expecting the corn yield to decline and the soybean yield to increase. The average trade estimate for the U.S. corn yield was 176 bushels while the trade estimate for the U.S. soybean yield was 51.1 bushels. USDA last month had the U.S. corn yield at 176.3 bushels and the US soybean yield was 50.6 bushels.  

Corn production was 15.019 billion bushels, last month, 14.996 billion bushels. U.S. soybean production was 4.448 billion bushels, last month, 4.374 billion bushels.

U.S. corn ending stocks for 2021-2022 were 1.5 billion bushels, last month, 1.408 billion bushels. U.S. soybean ending stocks were 320 million bushels, last month, 185 million bushels. Wheat ending stocks were 580 million bushels, last month, 615 million bushels. 

It’s no surprise U.S. soybean ending stocks are sharply above the September projection of 185 million bushels. The September 30 Grain Stock Report revealed soybean stocks were higher than expected. As a result of the higher stocks number, USDA raised the 2020 U.S. soybean production 81 million bushels.

We continue to see plenty of moving parts working into the equation for grain prices, which includes weather, U.S. harvest yields, export activity, China, Covid-19, and U.S. and world economies. The Gulf has recovered dramatically since the Aug. 29 landfall of hurricane Ida. However, shipping capacity from the Gulf is not yet at 100%. 

China’s rolling energy blackouts which began mid-September are still taking place. The blackouts stem from a low coal inventory which has reduced generating capacity. Their energy crunch in part can be directly attributed to the dozens of coal boats from Australia which have been stuck in port for months and unable to unload ships. Tariff disputes months in the making between China and Australia halted the unloading of those coal boats. Talk about a slow boat to China! The lack of sufficient electricity has effected soybean crushing plants in China. Crushing capacity in China is excessive which leads to why crushing plants downtime is not a bullish story. 

Numerous commodity prices have reached new highs the past two weeks. Crude oil moved above $80 as it made new 7-year highs, natural gas reached a 10-year high, cotton a new 10-year high. Oats are making all time new contract highs. Agricultural inputs are of major concern to producers and profitability for 2022. Input prices have made swift moves higher as 28% nitrogen has more than double since last fall along with other fertilizer prices have tripled in recent months. Food inflation in the months ahead can be expected to reach double digit gains as processors are paying increasing costs for energy, along with higher labor costs and dealing with ongoing labor shortages. All will play a major role well into 2022.

China continues to be buying soybeans hand to mouth and are not yet buying the weekly amount of soybeans which need to be imported. Overnight China bought 8-12 boats of soybeans from the U.S. and Brazil.

USDA today projected China would be importing 101 million tons of world soybeans. Last month it was 101 million tons. The Monday weekly crop progress report was delayed until 4 p.m. tonight due to the government holiday on Monday. U.S. corn and soybean harvest was expected to be near 50% completion.

Expect furious harvest activity in Ohio for the next three days. Rains are still in the forecast for Friday and Saturday. Daily highs through Thursday will reach into the high 70s and low 80s. A big change is coming shortly with daily highs for Saturday and Sunday will struggle to reach the mid 60s. 

Here’s to keeping all your harvesting activity going smoothly in coming days.

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