MarketsFarm — There have been no surprises in the price movement for U.S. soybeans and corn on the Chicago Board of Trade following the release of the U.S. Department of Agriculture’s monthly supply and demand report.
“This was a case [for soybeans] where the trade expected even tighter ending stocks. That 220 million bushels matched pretty much where last year’s carryout ended on the old crop,” said Ryan Ettner of Allendale Inc. in Fort McHenry, Ill.
Going into Tuesday’s world agricultural supply and demand estimates (WASDE), the average trade guess pegged the carryout for 2023-24 soybeans at 207 million bushels. Ettner added that there were some traders who called for the number to be below 200 million bushels. Nevertheless, USDA’s latest figure made for the tightest stocks in eight years.
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With the nearby November soybean contact between $13 and $13.50 per bushel, Ettner said that’s where it needs to be, given the September report (all figures US$).
“It’s a disappointment of what traders pre-bought, not a disappointment in the total carryout,” he stated.
As for U.S corn, Ettner commented the commodity remains somewhat optimistic. Its 2.22 billion-bushel carryover should pull corn’s November contract down to the $4.30 to $4.40/bu. range, as the average trade guess called for 2.14 billion.
Corn production as well is set to hit a record 15.13 billion bushels, higher than the 15.01 billion the trade projected. However, Ettner cautioned that could drop once the U.S. corn harvest is fully underway.
He said at five per cent complete countrywide, there’s simply too little of the 2023/24 crop at this point to go on, and that corn is trading at a premium. The WASDE pegged yields at 173.8 bu./ac. compared to the 175.1 in August. However, an increase in harvested acres led to the record output.
“Traders feel we will be lowering the yield even more in upcoming reports,” Ettner stated. “Once combines get going full force, they’ll be finding worse fields that what the USDA has expected.”
Ettner also pointed to the export demand for soybeans and corn. While those for soybeans are slightly behind USDA’s projections, there has been a recent spate of sales that could close the gap. That said, the department trimmed soybean exports from the 1.83 billion bushels in August to 1.79 billion.
However, corn remained well behind of USDA expectations and he said the export numbers will likely be reduced in upcoming reports. In the September report corn exports were held at 2.05 billion bushels.
— Glen Hallick reports for MarketsFarm from Winnipeg.
