** USDA November Crop Report Analysis: The USDA November crop report failed to offer any bullish fodder with CBOT prices in retreat at midday. An all time record large US corn yield of 175.4 BPA was reported by NASS. This year’s big US corn yield argues that should normal summer growing conditions develop, the US could produce its first corn yield above 180 BPA. The US soybean yield was left unchanged at 49.5 BPA which means that large US corn and soybean end stocks persist. US corn and soybean exports were left unchanged, with the only export change being in wheat with an increase of 25 Mil Bu to 1,000 Mil Bu. The report is not going to alter prevailing price trends with corn/wheat/soybean prices caught in a range pending South American weather heading into February.
** NASS reported a record large US corn yield of 175.4 BPA, surpassing last year’s 174.6 BPA. It’s rare that you get two crop years in a row with record US corn yields. The IA corn yield was increased 6 BPA to 197 BPA while IL rose 6 BPA to 198 BPA. ND/IN posted the biggest gains at up 8 BPA.
** The ‘17 US corn crop was estimated at 14,578 Mil Bu, down just 570 Mil Bu from last year’s record. Note that 2017 US corn seedings fell 3.6 Mil acres to 83.1 Mil acres. Total US corn supplies at 16,922 Mil Bu equal last year.
** US 2017/18 US corn end stocks are estimated at 2,487 Mil Bu, up 192 Mil Bu from last year. WASDE increased US corn exports to 1,925 Mil Bu (up 75 Mil Bu) with feed/residual increased to 75 Mil Bu to 5,575 Mil Bu. The average farmgate price was estimated at $3.20. The report argues for a range in spot CBOT corn of $3.30-3.70 in coming quarters.
** World 2017/18 corn end stocks were raised 3 MMTs to 204 MMTs based on the increase in US corn stocks. The Ukraine corn crop was cut 2 MMTs to 25 MMTs. No change in new crop South American corn production was offered.
** NASS left the US soybean yield at 49.5 BPA with a crp of 4,425 Mil Bu. A bigger decline in yield was expected. US 2017/18 soybean end stocks were lowered 5 Mil Bu to 425 Mil Bu with with the average US farmgate price being raised a dime to $9.30. The report confirms a sideways trading range of $9.50-10.10 into ’18.
** World 2017/18 soybean stocks at 97.90 MMTs was up nearly 2 MMTs amid a 1 MMTs increase in the Brazilian crop to 108 MMTs, while the Argentine crop held steady at 57 MMTs. China’s 2017/18 soybean imports were raised 2 MMTs to 97.0 MMTs. As expected, China’s old crop soybean imports were raised to 93.5 MMTs. The world soy balance sheet offers little market fanfare without a South American weather problem!
** US 2017/18 wheat end stocks were lowered to 935 Mil Bu based on a 25 Mil Bu increase in exports. No other demand changes were made. Class balance sheets offered a 26 Mil Bu drop in US HRW wheat stocks to 461 Mil Bu, a 5 Mil Bu decline in HRS stocks to 157 Mil Bu and modest increases in SRW, white and durum end stocks. Such stocks argue for a trading range of $3.95-4.40 basis spot Chicago futures.
** 2017/18 world wheat production was record large at 752 MMTs with WASDE holding Aussie wheat production at 21.5 MMTs. Russia wheat production was raised to 83.0 MMTs (up 1 MMTs), with the EU crop increasing by 500,000 MTs to 151.5 MMTs. The Argentine wheat crop was left unchanged at 17.5 MMTs. The world holds an abundance of wheat in exportable position.
** The CBOT is weaker, but will not fall out of bed after being in a persistent bear market. However, only adverse South American weather can produce a lasting recovery. Our expectation is for range bound markets into 2018. Traders position long soy on breaks and sell grains on rallies!
