Market Analysis: Slight US crop changes expected with corn down & soybeans up 
The upcoming USDA November crop report has the trade anticipating modest changes in the size of US corn and soybean crops with similar limited impact on each 2016/17 balance sheets on November 9 update. The latest survey of trade analysts is projecting 16 million drop in the US corn output to 15.041 billion crop while this same group is expecting a 46 million rise in the US soybean crop to 4.314 billion bu. This would mean a 0.2 bu. drop in the US corn yield to 173.2 while soybeans’ average yield could rise to 52 bu. from 51.4 bu. last month.

In corn, the lack of late season field reports from many Midwest states seems to have prompted the two major pre-report production surveys of industry contacts to impact other trade analysts estimates with their limited changes from their 174-175 estimates. Over the past 10 years, corn’s November yield has been lower in 7 years by an average of 1.4 bu. and the trade’s average estimate for November has been higher than USDA’s level 8 out of last 10 years (not shown). With slight declines in most states except the N. Plains, we expect 171.4 bu. yield vs. 173.4 last month. With no change in corn’s 2016/17 demand levels anticipated despite strong ethanol and export shipments, corn’s smaller crop could decrease this year’s ending stocks to 2.143 billion bu.

In soybeans, a different US yield trend has occurred from October into November. Over the last 10 years, the US yield has rose 6 times vs. 4 years of declines with some recent hefty jumps the past 4 years. Given 2016’s yield is already 3.4 bu. over last year’s previous record year and the USDA’s November yield has below the trade’s estimate 6 of last 10 years (not shown), we don’t expect the recent whisper talk of 53 bu. to occur vs, our US 52 bu. yield estimate. With this year’s export sales & shipments now 83 & 38 million bu. ahead of 5 year average paces, exports could be upped 25 million this month. 

What’s Ahead:
If this month’s production levels aren’t too burdensome, this year’s strong demand levels and the need to push more supplies through our domestic river system before it closes (in early December), could firm prices to recent highs for another selling opportunity, basis Dec corn at $3.60 and Jan beans at $10.30 South American weather will determine if corn & bean prices be able to make new highs