Today’s WASDE report was largely a non-event for the grain markets. Few material changes were made to domestic or global balance sheets, and today’s price action was largely reflective of that. In spite of the recent dryness across the corn belt, USDA remains aggressively optimistic about corn and soybean yields, with USDA modestly increasing projected corn yields to 183.6 BPA and left soybean yields unchanged at 52.3 BPA. Export sales this morning were a mixed bag. Corn sales missed expectations coming in at just 667,000 tonnes, while soybean sales were toward the upper-end of expectations at 1,474,000 tonnes.
Corn
The elevation in domestic corn yields to 183.6 BPA pegs domestic corn production at 15.2 billion bushels - up 39 million from last month. The initial disappointment was reflected by corn futures dropping nearly 7 cents after the report’s release, but it didn’t take long for Dec corn to come back. The silver lining for corn came in the reasoning behind the 55 million bushel reduction in beginning stocks - increased export activity and corn used for ethanol production in 223/24. While this morning’s corn sales were disappointing, sales activity has picked up substantially over the past 6-8 weeks with Mexico and China serving as regular customers. So long as demand remains strong, today’s increase in production is negligible. Global balance sheets were also left virtually unchanged with the exception of ending stocks, which came in at 308.35 million tonnes (down from 310.17 million tonnes last month). While December corn dropped nearly 7 cents upon the report’s release, it managed to claw everything back and close 2 cents higher to 406.
Soybeans
Though soybean yields were left unchanged, domestic soybean production estimates were lowered a touch to 4.586 billion bushels (4.589 billion bushels last month). USDA opting to punt on yield adjustments raised eyebrows as dryness across the corn belt over the past 2 months. Even still, it wasn’t perceived as a needle-mover on today’s settlement price. Soybean exports this week were impressive, and came in toward the upper-end of traders’ estimates at 1.474 million tonnes. While sales were slow to start the year, China and “Unknown Destinations” have ramped up significantly since July. Any impediments to Brazilian planting progress, or lack of relief in Mato Grosso’s drought conditions could send further demand to U.S. soybeans and soybean products. Like corn, the initial move lower in soybeans did not last as the November contract settled 11 ¼ cents higher to 1011 ¾.
Wheat
There was nothing to write home about on domestic wheat alterations in today’s report. But, the global numbers had some key changes. Global production remains record-high......
Check out the full article at Blue Line Futures: https://bluelinefutures.com/2024/09/12/wasde-report-recap-2/
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