Strong USDA corn yield estimate weakens corn market | Weekly Commodity Market Update

Brownfield Ag News

This week Will and Ben look at what USDA's strong corn production estimates mean for the market.

Market recap (changes on week as of Monday's close):

» December 2024 corn up $.03 at $4.10

» December 2025 corn up $.03 at $4.48

» November 2024 soybeans down $.14 at $10.04

» November 2025 soybeans down $.06 at $10.57

» December soybean oil down 1.37 cents at 39.11 cents/lb

» December soybean meal up $1.20 at $323.80/short ton

» December 2024 wheat up $.10 at $5.78

» July 2025 wheat up $.09 at $6.13

» December 2024 cotton up 5.13 cents at 72.82 cents/lb

» December 2025 cotton up 2.09 cents at 72.44 cents/lb

» October WTI Crude Oil up $1.25 at $70.10/barrel

Weekly highlights:

The Consumer Price Index (2.5%) and the Producer Price Index (1.7%) had annual changes that both came in below levels experienced in July and analyst pre-report expectations.

US energy stocks were up across the board last week as crude oil, gasoline, distillate fuel, and ethanol stocks increased 35, 97, 97 and 15 million gallons, respectively. Implied gasoline use fell 5% on the week.

US ethanol production increased 5 millin gallons to 318 million gallons on the week- compared to 305 million gallons last year and 283 million gallons in 2022. Ethanol profitability remains supportive of relatively high crush margins.

The September WASDE Report showed a larger US corn yield at 183.6 bushels per acre, a higher sorghum yield at 57.4 bushels per acre, a lower cotton yield at 807 pounds per acre, lower rice yield at 7,588 pounds per acre, and flat soybean and wheat yields at 53.2 and 52.2 bushels per acre, respectively. Global soybean stocks continue to be burdensome.

Open interest in Chicago commodities was down for wheats (-3.8%) and soybean meal (-0.8%), while up for corn (+0.6%), soybean (+1.7%), soybean oil (+1.0%), cotton (+1.3%), and rough rice (2.5%).

Money managers were net buyers of Chicago wheats (+21,954 contracts), corn (+44,077 contracts), soybeans (+23,495 contracts), soybean meal (+13,877 contracts), and rough rice (+376). They were net sellers of soybean oil (-90 contracts) and cotton (-6,827).

The new marketing year has started for corn, grain sorghum and soybeans with export sales for the first week of the marketing year reported at 26.2, 2.8 and 54.2 million bushels, respectively. Maybe most notable in the data were US soybean export sales to Argentina.

US Crop Conditions:

There are some chances of precipitation across the country this coming weekend and in the Atlantic Coast states, but unfortunately the broader region remains hotter than normal.

The corn crop seems to be getting bigger as harvest rolls along. The lack of precipitation and hotter than normal temperatures had many thinking that weekly corn conditions ratings would deteriorate on the week. Instead corn ratings increased one percentage point. It is likely that producers are finding yields on their yield monitors and the conversation has influenced condition’s reporters that the crop is better than originally reported. This is bearish to the corn market in the short run.

US grain and oilseed export inspections were neutral. Corn shipments of 26.5, grain sorghum shipments of 2.6, and soybean shipments of 14.7 million bushels were all within expectations but below recent volumes. Wheat shipments of 20.5 million bushels were slightly higher than recent volumes.

The National Oilseed Processors Association reported their members crushed 158.0 million bushels of soybeans in August- well below all trade estimates and the lowest monthly volume since September 2021.

US corn conditions ratings were 1 percentage point higher on the week to 65% good to excellent when the expectation was for a 1 percentage point decline. Corn harvest is 9% completed compared to 5% this time last year.

US soybean conditions rating was 1 point lower- matching expectations. Soybean harvest is 6% complete as of Sunday.

Topics:

» Market recap

» September crop supply and demand

» Soybean crush drops to three-year low

» Managing an operation during low prices

» Federal Reserve to meet over interest rates

» Reports to watch

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