Bearish soybeans, bullish wheat — a look at the USDA's October estimates

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U.S. soybean yields and ending stocks will be larger than the trade was expecting, according to the U.S. Department of Agriculture’s October supply/demand report.

Based on the reaction in the futures market, the USDA’s October numbers, released Tuesday, were bearish for soybeans, somewhat bearish for corn, and bullish for wheat.

The average American soybean yield for 2021 was pegged at 51.5 bushels per acre, up from 50.6 last month and slightly higher than the average pre-report estimate of around 51. Soybean ending stocks were estimated at 320 million bushels, up substantially from 185 million in the September report, largely due to higher production.

For corn, the average yield was projected at 176.5 bushels per acre, almost unchanged versus 176.3 last month, and slightly higher than the trade was expecting. The corn ending stock estimate was bearish, coming in at 1.500 billion bushels, up from 1.408 billion in September. The average trade estimate was around 1.43 billion.

Wheat futures rose by double digits following the report, in which the USDA cut its wheat ending stock estimate from 615 million bushels in September to 580 million bushels. Average wheat yield was estimated at 44.3 bushels per acre.

As part of its global outlook, the USDA reduced Canadian wheat production by 2 million tons to 21.0 million. Canola production for Canada was lowered by 1 million tons to 13.0 million, based on Statistics Canada’s estimates.

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