Soybean yield drops, prices up double digits

By Doug Tenney, Leist Mercantile

The corn yield went up and the soybean yield went down. Huge price action took place for soybeans. Soybean exports down 40 million bushels, soybeans for crush unchanged. 

After the noon report was released, corn was 6 cents, soybeans up 25 cents, and wheat up 9 cents, Just before the report, corn was down 3 cents, soybeans down 4 cents, with wheat unchanged. 

Trade expectations for this report had both corn and soybean yields increasing. Soybean exports were expected to decline while ending stocks were expected to increase. Corn bulls were expecting demand to increase and ending stocks to decline. Note that USDA is often slow to even very slow to increase demand numbers even when the trade had expected increases for months. 

The U.S. corn yield today was 177.0 bushels per acre and the U.S. soybean yield was 51.2 bushels per acre. Traders were expecting both the corn yield and the soybean yield to increase. The average trade estimate for the U.S. corn yield was 176.9 bushels while the trade estimate for the U.S. soybean yield was 51.9 bushels. USDA last month had the U.S. corn yield at 176.5 bushels and the U.S. soybean yield was 51.5 bushels.  

Corn production was 15.062 billion bushels, last month, 15.019 billion bushels. U.S. soybean production was 4.425 billion bushels, last month, 4.448 billion bushels.

U.S. corn ending stocks for 2021-2022 were 1.493 billion bushels, last month, 1.500 billion bushels. US soybean ending stocks were 340 million bushels, last month, 320 million bushels. Wheat ending stocks were 583 million bushels, last month, 580 million bushels. 

USDA today projected China would be importing 101 million tons of world soybeans. Last month it was 101 million tons. 

Corn and soybean prices have been on the defensive since early last week when December CBOT corn reached $5.86 and January CBOT soybeans peaked at $12.59 ½. Producer selling has dropped immensely in that time.

Looking ahead to the Dec. 9 USDA report day, there will not be any changes in U.S. corn and soybean yields or production in that WASDE report. That format is normal and reflects the trend seen for many years with past December WASDE reports. USDA will publish the final 2021 corn and soybean yields and production on Jan. 12, 2022.

While not a new story, the rapidly rising input costs since spring for fertilizers and chemicals, is a headline which is not disappearing. It will be with us for months into 2022. Producers are already in shock with 2022 budgets compared to this year. Suppliers’ hands in your pocket are not going away. 

Since the Sept. 1 beginning of the marketing year for 2021-22 corn and soybeans, the export pace for both is behind that of last year. Soybeans exported total 508.9 million bushels compared to last year’s 735.8 million bushels, a decline of 31%. Corn exports since Sept. 1 totaled 237.6 million bushels compared to last year’s 299.3 million bushels, a decline of 21%. 

Ethanol margins continue to be robust, a vast contrast to poor margins seen for many months earlier this year. Some Midwest ethanol facilities are having trouble sourcing corn even in the midst of harvest activity. Reports suggest the pipeline is getting recharged at a slower pace than normal for this time of year. Likewise for soybeans, soybean crush margins have been phenomenal in recent weeks. 

Calendar year 2022 has the opportunity to provide much excitement for soyoil usage. In the past we have seen soyoil blended with diesel to make bio-diesel. The technology is now available to make diesel fuel from soyoil. The airline industry is also looking to obtain jet fuel directly from soyoil.

Ohio weather has been excellent for harvest this past week. Harvest activity will be brisk for the next few days with rains returning on Thursday. Last week’s cold morning temperatures yielded heavy freezes, ending double crop soybeans to their finale. The weekly USDA crop progress report yesterday afternoon estimated the US corn harvest at 84%. Ohio’s corn harvest was below that pace at only 65%. The US soybean harvest was 87% with Ohio’s soybean harvest not far behind at 81%. 

China continues to be an almost no-show in buying U.S. corn and soybeans. They have not bought U.S. corn since the spring. It was a big surprise last week when China bought Brazil soybeans to be shipped late December. The headlines suggested soybeans would be available late December due to farmers selling the last of their old crop soybeans. Typically Brazil is not shipping new crop soybeans until January or early February. 

Expect the report to be quickly dismissed following the report release at noon eastern time. Weather, exports, demand, input costs, along with projections for 2022 corn and soybean acres will be huge price drivers into next year. 

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