Market Analysis

This month’s USDA crop reports revealed slightly higher US corn (CORN) and soybean (SOYB) yields, crop sizes and new-crop endings stocks as the trade was expecting. The exception was this month’s 2021 acreage adjustments. Corn’s harvested acres were upped 590,000 while soybeans area was sliced 280,000 acres. Overall, these changes were substantially lower than pre-report trade ideas. The biggest USDA acreage change occurred in US sorghum plantings which were increased by 850,000 from June’s survey.

September’s US corn output was increased by 246 million to 14.996 billion bu when the US yield was upped by 1.7 bu to 176.3 bu. However, this crop size was only 54 million higher than the trade’s expectations. Higher acres in the WCB while the ECB yields were held strong limited this month’s US yield increase. The World Board shaved late season old-crop ethanol and exports boosting corn’s carryover by 70 million bu. However, they also upped new crop’s feed and export demand by 75 million bu each. This kept the USDA’s 2021/22 corn stocks at 1.4 billion bu. just 26 million higher than trade expectations.

This month’s US 2021 soybean crop rose by 35 million bu to 4.374 billion bu, (3 million smaller than trade’s forecast). Of importance was the USDA’s big shift of soybean harvested area from out of the ECB (-480,000) and MidSouth (-380,000) to the WCB (+510,000) in this month’s acreage revision. This limited the US yield change to 50.6 bu., up 0.6 bu. The USDA also sliced 15 million from soybeans’ old-crop crush which boosted old-crop’s carryover to 175 million bu. The World Board also decreased beans new-crop crush by 25 million bu because of reduced US hog numbers. However, they upped 2021/22’s bean exports by 35 million bu. This kept the coming year’s stocks at 185 million bu near the trade’s average estimate.

With the US Small Grain report out September 30, no acreage or output changes in wheat (WEAT) were made this month. The USDA did slice 10 million from imports reducing 2021/22’s US stock outlook to 615 million bu.

What’s Ahead:

After a pre-report defensive tone, prices have initially recovered on shortcovering after the data.. However, progress on the reopening of US Gulf export facilities and ongoing Asian buying will be needed for funds to support prices with the US harvest approaching. La Nina’s impact on S American weather & early US yields will be watched closely.

Hold your 2021/22 sales at 25% level at this time.