Corn and wheat futures moved higher, while soybean values dropped following the release of the U.S. Department of Agriculture’s November crop production and supply/demand estimates on Monday morning.
The numbers were not as bearish as many traders and analysts were expecting, says Mike Krueger, president of The Money Farm, in the interview above.
“People thought we’d maybe see the USDA increase the corn yield again to another all-time record high, and in fact they reduced the yield by 8/10ths of a bushel,” he explains. “So I think the corn number is slightly better than expected.”
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The soybean news was more bearish, leading to double digit declines in nearby futures months.
“With soybeans, they did raise the yield, but just slightly, and they offset that production increase by expanding the crushing forecast by 10 million bushels and the export forecast by 20 million bushels. The end result was U.S. soybean ending stocks were left exactly unchanged at 450 million bushels,” says Krueger.
The November report rarely includes changes to wheat production estimates, he notes, but due to the delayed harvest this year, spring wheat production was cut. Ending stocks for hard red spring wheat were also reduced by 30 million bushels.
“That’s not a huge number, but it should say the (Minneapolis) spring wheat market will begin to gain a little bit on Chicago and Kansas City,” he says.
The USDA will release its final agricultural supply/demand estimates for the calendar year on December 10th.