November 8, 2019 / 6:35 PM / 4 days ago

Instant View: USDA lowers corn yield estimate, leaves soy unchanged

CHICAGO (Reuters) - The U.S. Department of Agriculture in a monthly report on Friday lowered its U.S. 2019/20 corn yield estimate to 167.0 bushels per acre, from 168.4 in October, but left its estimate of the U.S. soybean yield unchanged.

FILE PHOTO: A corn field and storage bins are seen on the Doug Zink farm near Carrington, North Dakota, U.S., August 8, 2019. Picture taken on August 8, 2019. REUTERS/Dan Koeck

The government’s projection of the U.S. corn crop was 13.661 billion bushels, down from 13.779 billion in October.

The USDA left its soybean yield estimate at 46.9 bushels per acre and soybean production at 3.550 billion bushels, but raised its U.S. 2019/20 ending stocks forecast to 475 million bushels, from 460 million last month.

The government lowered its estimate of 2019/20 U.S. wheat production to 1.920 billion bushels, from 1.962 billion previously.

Chicago Board of Trade December corn futures rose after the reports were released, but later turned lower. CBOT December wheat briefly turned up before retreating while January soybean futures pared losses.


* USDA cuts U.S. corn harvest forecast

* U.S. and world crop highlights-USDA

* Trade estimates for corn, soybean crops

* Trade estimates for U.S. grain stocks

* Trade estimates world crop end-stocks


* Craig Turner, commodities broker at Daniels Trading:

“For corn, I think the bulls will take a punt on this report and see if the yields come down and the harvested acres come down in the January report. Until then, I think the trade will be rangebound - up 10 to 15 cents, down 10 to 15 cents - while people debate the yield and harvested acres numbers.”

“For soybeans, I think you can just throw this report out the window. I do expect USDA to make some changes in January to the acreage and yields for soybeans, but you could tell that in this report, they took a punt.”

* Don Roose, president of U.S. Commodities:

“After the government looked at the corn numbers up and down, they only took the price of corn up a nickel. The yield coming down wasn’t huge ... The trade was expecting usage to come down on corn, which it did. But a 1.9 billion-bushel carry-out is not a bullish number.”

* Karl Setzer, commodity risk analyst for AgriVisor:

“At the end of the day, corn carry-out is still holding around 1.9 billion bushels. We only took it down 19 million this month. That’s not a number that’s going to get trade overly excited.”

“We sold corn (futures) way too hard coming in to this report. I think what we’re seeing is a simple classic case of sell the rumor, buy the fact.”

“We simply need corn demand to pick up. If our corn sales were any worse, they’d be bringing it back to us.”

* Brian Hoops, president, Midwest Market Solutions:

“There’s nothing in this report that’s friendly to the corn at all. Ending stocks were above the average trade guess ... Yields did come down, but not enough to offset the slowing demand.”

“We were negative (in corn futures) going into the report and so now we’re seeing a little bit of a relief bounce. But from a longer-term standpoint, there’s very little reason to think that corn is going to begin an up-trend in this market.”

“(Soybean) ending stocks were a little bit above last month, and that’s enough reason that beans are going to struggle.”

* Terry Reilly, senior analyst, Futures International:

“U.S. wheat production going down 42 million bushels was a complete surprise for us. We didn’t expect USDA to address the wheat production until the January report. That threw a lot of people off guard.”

* Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage:

“The corn number that looked to me like the most bullish part was that world stocks were down ... We really sold off ahead of this thing. Aside from what the numbers said, (the futures market) acts like everybody had overdone it a little on the bearish side ahead of the thing.”

“We still don’t know how those last 20 to 30% of the corn that was planted so late is going to yield.”

* Mike Zuzolo, analyst, Global Commodity Analytics:

“The trade will need to unwind the bean-corn spread, on corn yield declining - which they (USDA) did through adjusting the plant population. The market will need to start lining up with the idea that another cut could be coming from USDA on corn on test weights and lighter weights ... I’d expect that with the next WASDE report in January. But honestly, right now, I wouldn’t rule out that they could put out some sort of special report.”

* Charlie Sernatinger, analyst with ED&F Man Capital:

“Friendly on corn and wheat (futures), with the USDA lowering wheat production 42 million bushels; the bean numbers were fairly neutral with the USDA holding Chinese imports at 85 million tons. Corn stocks may not be getting as low as expected, but they are still declining. We should close everything up, with beans lagging on bean/corn spread liquidation.”

(Corrects 4th analyst’s company name to Midwest Market Solutions, not Midwest Marketing Solutions)

Reporting by Chicago commodities desk

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