Soybeans slightly friendly, corn and wheat neutral

Overall the report was not a huge shocker. No big price movement took place at noon. 

USDA estimated corn production at 13.555 billion bushels, last month it was 13.585 billion bushels. The corn yield came in at 168 bushels, compared to 167.5 last month. That is a bit bearish. Traders were expecting the corn yield to be reduced. Corn ending stocks were 1.561 billion bushels, last month they were 1.592 billion bushels. Corn acres were down as expected.

Soybean production was pegged at 3.888 billion bushels while at 3.935 billion bushels last month. The soybean yield was 47.2 bushels per acre, last month it was 47.1 bushels per acre. Soybean ending stocks were 425 million bushels, down 25 million bushels from last last month. Soybean acres were cut 1.1 million acres. No surprises there. Traders the last several months have paid strong attention to soybean ending stocks. Two months ago they had expected ending stocks to drop below 370 million bushels.  Instead they came out at 470 million bushels, resulting in November CBOT soybeans down 61 cents that report day.

Prior to the report corn was down 1 cent, soybeans down 8 cents, with wheat unchanged. Shortly after the report came out corn was down 3 cents, soybeans up 6 cents, and wheat was down 1 cent. Corn was down 8 cents at one time but quickly recovered.

Many were looking for this report to be more volatile and price changing than the September report. It will have plenty to watch for producers and traders alike. The computers will be reading the headlines. Price changes for corn and soybeans could be 5 to 20 cents in a few minutes as at least three different numbers will be closely watched. They would include yield, production, and ending stocks. The computers will be reading the headlines only, hence the rapid fire price changes both up and down in only a few minutes. Traders and analysts will be looking at all of the numbers for each crop in its totality. Computers cannot do that. The September report did provide some price changes, especially with corn up 12 cents that day. However, the report was quickly dismissed. 

With this report both USDA and NASS have many more actual field samples of harvested crops upon which to base their projections. In addition, FSA acre numbers will also be part of the equation for total corn and soybean production. The report today detailed corn and soybean production, ending stocks, and demand.  Traders were looking for corn yields to decline while soybean yields are expected to increase. Those expected changes from traders are very small, less than half a bushel per acre for both corn and soybeans. Ending stocks for corn and soybeans are expected to be lowered across the board for corn, soybeans, and wheat. One other factor receiving minor press will be actual corn and soybean acres. Many are expecting soybean acres to decline at least a million acres. This accounts for traders’ expectations for reduced soybean production and ending stocks in spite of higher yield estimates. 

Corn and soybean harvest continues to advance across Ohio and the Midwest. Ohio’s farmers have been aggressively harvesting soybeans the past three weeks.  Rains in central Ohio prevented soybean harvest for many one to two days this week. Western Ohio did not receive the rains seen in other parts of Ohio. Those light rains have western Ohio wanting more rain in order to get wheat planted up and going strong before winter sets in. This week’s harvest report on Monday put the U.S. corn harvest at 27% for the US, 32% had been expected. US soybean harvest was 42%, 35% had been expected.

Lines at Ohio’s grain elevators continue to be all over the place. It obviously is a function of time and space. At times very few trucks are on the lot. Time it wrong and the wait could be hours to dump one truck. Those with home storage but not enough due to higher than expected yields have been able to move bushels to town now rather than waiting till the last 25% of harvest. 

Reports indicate China is trying to sell corn out of their reserves. The government’s instructions are to move it and not lose money. Two factors indicate that will be a very difficult objective to achieve. First the corn reserves are in the north, corn demand is in the south. Second, the corn in reserves is of very poor quality.  China earlier this year has been a buyer of corn from Ukraine while buying sorghum from the U.S. Look for U.S. sorghum exports to China falling off sharply in coming months. 

Harvest weather looks to be very favorable for Ohio and the Midwest as the six to 10 day forecast is showing normal to above normal temperatures and normal rainfall. The farmer sell rate and harvest progress will be the main factors for grains during the month of October. Corn and soybean acres for 2015 were lowered about as expected.