IARN — The USDA’s November WASDE report had grain markets closing higher on Tuesday after a bullish drop in soybean yield.
Allendale commodity broker Greg McBride says the report ranged from neutral to bullish for the grains.
“We were looking for a slight decrease in corn ending stocks and an increase in bean ending stocks,” said McBride. “We did get both of those, but not to the degree the average guess would have there. We were looking at a 1.48 billion ending stocks number for corn. It came in at 1.493, so slightly higher than expected. Beans increased by 20 million bushels to 340, but that was under the average guess which was 362. When you look at what we got out of that, it was a little bit friendly or not as bearish as expected.”
McBride says the USDA lowered soybean yield, which caused soybean futures to surge higher.
“Came in at 51.2 where we were looking for an increase to 51.9,” said McBride. “When you get through all of the numbers in the balance sheet, the thing that is most glaring is the fact that soybeans – even though you saw decreases to yield and production – did decrease the export demand number by 40 million bushels. That’s why we saw an increase in ending stocks. The biggest thing we take away from this is that even though you saw a friendly miss on the soybean numbers – and the market went up over 50 cents on the initial reaction – it really doesn’t change the fact that we’re seeing exports backing off. That is not what we want to see with Brazil planting as fast as they are.”
Reports say lower yields in Iowa, Ohio, Kansas and Indiana accounted for most of the change in production on Tuesday’s WASDE.
Story courtesy of the Iowa Agribusiness Radio Network.
