By Doug Tenney, Leist Mercantile
Corn and soybean production and yield both increased. That was a surprise. Corn and soybeans did not fall apart. Corn ending stocks were lower than expected which helped offset the higher corn production. Soybean ending stocks were unchanged, that was a surprise. Soybean stocks were larger than expected, also a surprise.
Shortly after the USDA report was released, corn was unchanged, soybeans down cents, and wheat down 1 cent. Shortly before the noon report, corn was down 3 cents, soybeans down 2 cents, and wheat down 2 cents.
The report today has long been awaited. Two numbers were heavily watched for this report, U.S. corn production, and U.S. stocks of soybeans on Dec. 1, 2019.
There are a bunch of numbers for the U.S. and world grain production. Corn supply bulls were hoping for major reductions in corn production and yields. Corn demand bears were quick to highlight the declining export demand since last May, which was 425 million bushels along with shrinking corn used for ethanol at 125 million bushels. Record hog production last year along with high cattle numbers could help push corn fed to livestock higher.
Today’s report had the U.S. corn production at 13.692 billion bushels, a corn yield of 168.0 bushels, and ending stocks of 1.892 billion bushels.
The average trade estimates for corn had production at 13.513 billion bushels, a US yield of 166.2, and ending stocks of 1.757 billion bushels. Last month corn production was 13.661 billion bushels, the U.S. corn yield at 167, and ending stocks of 1.910 billion bushels.
For soybeans, the U.S. production was 3.558 billion bushels, yield of 47.4 bushels, and ending stocks of 475 million bushels. The average trade estimates for soybean production was 3.512 billion bushels, U.S. yield of 46.6 bushels, and ending stocks of 424 million bushels. In December, U.S. soybean production was 3.550 billion bushels, yield at 46.9 bushels, and ending stocks of 475 million bushels.
U.S. grain stocks as of December 1, 2019, had corn at 11.388 billion bushels, and soybeans of 3.251 billion bushels. It has been known for weeks that the unharvested corn acres in the Dakotas would be counted as on farm bushels. The last weekly crop progress report had the North Dakota corn harvest at just 43%. With several snowstorms since October, those corn bushels are not yet in the bin. Crop insurance companies indicate adjustors cannot complete the loss process at this date. It will be weeks or even months from now when the snow has melted and is no longer there.
U.S. wheat acres were expected to continue the trend of declining. Last year those acres reached a 125-year low.
Lost today at noon but not forgotten is the expected signing next week on Jan. 15 when the U.S. and China sign the Phase 1 trade deal. Their Vice Premier and others will be coming to the U.S. for this long expected signing.