Report neutral to supportive for corn, bullish for soybeans

CHARLOTTE, Mich. — Production cuts provided a slice of support for corn and soybean prices after the U.S. Department of Agriculture’s supply and demand estimates report was released Nov. 8.

Angie Setzer and Karl Setzer, co-partners at Consus Ag Consulting, gave their reactions to the new USDA data in a live podcast on X, formerly Twitter.

Starting with the domestic corn balance sheet, what was expected and not anticipated?

Angie: The corn yield came in at 183.1. So, corn carryout came in at 1.938 billion bushels. Traders were anticipating corn carryout to come in at 1.946 billions bushels. It came in down about 61 million bushels from last month. All of that was on the back of a production cut.

There were no changes to demand even though the early export sales book for corn was one of the best, if not the best, we’ve seen in several years.

I’m surprised they left exports unchanged with what we have seen. Demand on the corn side was basically unchanged for the most part.

There was also downward movement in U.S. soybean supplies, right?

Karl: Soybean production came in at 4.46 billion bushels, down 3% from last month. Yield came in at 51.7 bushels per acre, down 1.4 from last month.

Angie: Carryout was quite a bit lower than what was anticipated. Soybean carryout came in at 470 million bushels, that’s 62 million bushels less than what traders were expecting and 80 million less than last month. Who would have thought a dry finish to the crop would have reduced yields?

The domestic wheat balance sheet has been relatively flat the past several months. Did that trend continue?

Angie: Wheat came in a little bit different than expected. I think we were expecting carryout of 813 million bushels and it came in at 815 million. That’s close enough for the folks I hang out with.

There were no real changes in carryout by wheat class. It was a little lower in the hard red, a little higher in the hard spring, a little lower in the soft red, the same in white, a little higher in durum.

What impact did the lower U.S. production have on the global numbers?

Angie: Soybean global ending stocks are 131.7 million tons and the trade was expecting 134 million — not a huge difference, but a bit of adjustment. Really the only changes we had on the global soybean numbers was from the U.S. cut.

Karl: Global corn ending stocks were 304.1 million tons and traders were expecting about 306 million. That was 306.5 in October. We’ve seen a continuation of global corn ending stocks get dropped it seems year after year.

Brazil corn production is 127 million tons. Argentina corn is holding at 51 million bushels, so keep an eye on that.

What did the report tell us about the global wheat picture?

Karl: Global wheat ending stocks were 257 million tons, slightly higher than last month, but nothing crazy there. Kazakhstan took their wheat crop up 2 million metric tons to 18 million.

They only cut the Russia wheat crop to 81.5 million and took the EU down to 122.6. Those are a lot less than the private crop cuts we got this week out of those regions, but those won’t be factored into this data yet.

Angie: Overall, I’d say this report was neutral to supportive for corn and bullish for soybeans.

What will you be watching for going forward in the marketing realm?

Angie: We’re going to be watching the cash market to see if we have continued strength in spreads. Now that the flat is moving higher like I think we’ll see, do the farmers get engaged in the market and does that help to refill this pipeline that we need to have full because we have super solid early season demand? This is one of those things that we have to keep watching out for.

Make sure if you’re a farmer that you’re working on putting target orders in that you’re engaged. If you’re in an area where you’re able to sell at $4.50 plus corn, and you had one of the better yields that you’ve ever experienced, turn some of those bushels into cash.

I don’t know what you’re really waiting for. If someone had told you at the start of August or the start of September when we were at $3.85 futures on December that you were going to be able to sell $4.50 cash you would have called them a liar.

So, make sure you’re doing something with these opportunities that you’re given. I’m not saying it stops, but scale selling as the market rallies is the best way to approach these types of things.