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Advisor
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Registered: ‎05-03-2010
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Floor Talk, November 8, 2018 (Report Day)

[ Edited ]

USDA SAYS:

 

In its November Supply/Demand Report, the USDA pegged the U.S. corn average yield at 178.9 bushels per acre, vs. the trade’s expectation of 180.1 bu./acre and its estimate of 180.7 in October. This equates to a production number of 14.626 billion bushels.

 

For soybeans, the USDA estimates the 2018 average yield at 52.1 bu./acre vs. the trade’s expectations of 53.0 bu./acre and the USDA’s October estimate of 53.1 bu./acre. That equates to a crop production total of 4.60 billion bushels.

 

U.S. Ending Stocks

 

The U.S. 2018/19 corn ending stocks are pegged at 1.736 billion bushels vs. the trade’s estimate of 1.775 billion bushels and the USDA’s estimate of 1.813 bill. bushels.

 

For soybeans, the ending stocks are estimated at 955 million bushels vs. the trade’s estimate of 906 million bushels and the USDA’s October estimate of 885 million.

 

USDA pegged the U.S. 2018/19 wheat ending stocks at 949 million bushels vs. the trade’s expectations of 969 million and the USDA’s October estimate of 956 million.

 

World Ending Stocks 2018/19

 

For soybeans, the world ending stocks are pegged at 112.08 mmt., compared with the trade’s expectation of 111.0 mmt. and the USDA’s October estimate of 110.0 mmt.

 

The USDA sees the world’s wheat ending stocks at 266.71 mmt., compared with the trade’s expectation of 259.5 mmt. and the USDA’s October estimate of 260.2 mmt.

 

TRADE REACTION

 

--Jason Roose, U.S. Commodities grain analyst, says the USDA has surprised the corn market.
“Initial reaction was friendly in today's all important November WASDE Crop Report, with all eyes focused on the lowered yield adjustments for corn and soybeans.”

 

Roose added, “Demand was reduced on soybeans which was anticipated. The surprise on this report was the large increase in the world ending stocks for corn with an increase of 151 mmt. This was due to a revision of China's corn crop production,” Roose says.

 

---

Jack Scoville, The PRICE Futures Group’s senior market analyst, says that the USDA’s soybean and corn yields and production estimates were below average trade guesses, but production completely overshadowed by the WASDE numbers.

 

“The changes in corn, wheat and soybeans due to the changes in China data for the latter two and finally the demand on the beans really hammered the market,” Scoville says.

 

The corn and wheat numbers would be bullish, without the changes from China, Scoville says.

 

“World stocks levels, outside of china, actually go down,” Scoville says.

 

The soybean market is recovering a bit, but the data is bearish due to the lost demand and sharp increase in ending stocks, Scoville says.

 

“I’m leaving the beans alone, for now. The analysts are not happy today, as USDA could have made the bean demand changes before today and not the same month as a key meeting between President’s Trump and Xi. And, as many have been pushing on USDA to get China its own column in the WASDE data. Wild stuff, but no reason to sell corn and wheat, China doesn’t buy neither in the world market that much anyway."

 

—Sal Gilbert, Teucrium Trading Owner, says that today’s WASDE release, and the USDA’s reliance on Chinese data which included up to ten years of revisions to Chinese agricultural supply and demand numbers, especially regarding corn usage and stockpiles, has raised for some traders a few doubts as to the validity of government reported numbers in this report. Traders are reconciling themselves to the potential of further revisions to U.S. numbers based upon actual harvest yields, which may be why market reaction has been muted to what seemed at face value, a bearish report. The fact remains that even with the inclusion of the Chinese data dump into the monthly WASDE, global stockpiles of grains are shrinking and usage is rising year-on-year.

 

—Mike North, CRMG analyst, says that while US corn yield reduction was greater than the expectation, the biggest story was the revision to Chinese inventory. In a stroke of the pen, Chinese inventories nearly quadrupled and caused world ending stocks to double. This came about after the newest Chinese ag census data was released.”

 

 

What say you?

 

Mike

---------------------------------

 

At midsession:

 

At midsession, the December corn futures are 1/4¢ lower at $3.72. March futures are 1/4¢ lower at $3.83.

 

January soybean futures are 11 1/4¢ lower at $8.68. March soybean futures are 11¢ lower at $8.81.



 

December wheat futures are 2 1/2¢ lower at $5.07.



December soymeal futures are 2.10¢ per short ton lower at $305.90.

 December soy oil futures are 0.36 lower at 27.84¢ per pound.


In the outside markets, the NYMEX crude oil market is $0.54 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 89 points higher.

 

Mike

--------------

At 9:40am:

 

The USDA released its weekly Export Sales Report, Thursday. The sales were not good enough to move the markets.

 

Corn= 701,500 metric tons, up 78 percent from the previous week and 32 percent from the prior 4-week average.

 

Soybeans= 391,400 mt., down 2 percent from the previous week, but up 16 percent from the prior 4-week average.

 

Wheat= 661,200 mt.,up 14 percent from the previous week and 47 percent from the prior 4-week average.

 

Soymeal= 256,000mt.

 

Mike

-------------

 

At 9:00am:

 

In early trading, the December corn futures are 1¢ higher at $3.73. March futures are 1¢ higher at $3.84.

 

January soybean futures are 1/2¢ lower at $8.79. March soybean futures are 1/2¢ lower at $8.91.



 

December wheat futures are 2 3/4¢ higher at $5.13.



December soymeal futures are 0.10¢ per short ton higher at $308.10.

 December soy oil futures are 0.20 lower at 28.00¢ per pound.


In the outside markets, the NYMEX crude oil market is $0.63 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 1 point higher.

 

USDA will release its Novembeer Supply/Demand Report at 11:00am CT. The trade expects the U.S. corn cropsize to go up and soybeans down.

 

What say you?

 

Mike

Veteran Contributor
Posts: 99
Registered: ‎06-14-2018
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Re: Floor Talk, November 8, 2018 (Report Day)

It's a rough day to be a farmer. Report did no favors today, I'm sure soon the chorus of "Crooks!" will be heard in this forum. 

Contributor
Posts: 15
Registered: ‎12-10-2010
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Re: Floor Talk, November 8, 2018 (Report Day)

Prices dropped instantly.  They don't seem to be worried about the quality of these corn and soybean crops. I'd start looking at where my seed was coming from . 

Advisor
Posts: 4,062
Registered: ‎05-03-2010
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Re: Floor Talk, November 8, 2018 (Report Day)

It's the world corn ending stocks number of 310 million metric tons that has this market shaken. And it's that high because China announced, this morning, that it has a 20% larger corn crop than first thought? Since when did the USDA react so quickly to foreign crop estimates in their monthly reports? This is the fastest that I have ever seen USDA massage their numbers. Wow!

 

Mike

Veteran Contributor
Posts: 73
Registered: ‎04-28-2011
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Re: Floor Talk, November 8, 2018 (Report Day)

No crooks in my opinion. Corn is off $.05, but the S/D doesn't look like that decline is justified. From where I sit corn looks to be supported into the Spring.

 

Soybeans are just in need of a tweet.

 

Farmers will be fine. Grain that just went in the bin can stay there a while. 

Veteran Contributor
Posts: 94
Registered: ‎03-26-2015
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Re: Floor Talk, November 8, 2018 (Report Day)

Farmers arent in it to make money just so everyone else does that's all we care about you know like the traders.
Veteran Contributor
Posts: 99
Registered: ‎06-14-2018
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Re: Floor Talk, November 8, 2018 (Report Day)

I'm happy to see some rational farmer that are taking it in stride, I was starting to think ya'll didnt' exist! 

Honored Advisor
Posts: 8,647
Registered: ‎07-18-2011
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Re: Floor Talk, November 8, 2018 (Report Day)

Listened to a historian discussing his book "The Land was Everything" -- book about the demise of family farming.

He estemates less than 500k actual noncorporate farmers left in the US.

He thinks the number continues to dwindle as vertical integration of agri business continues and washington continues to ignore monopoly laws in order to provide food world wide, out of season, and work free for the american consumer.

 

He says the small farm startup "nitch" farms are on the rise, but will be very limited as consumers will continue to demand convenience and fresh while it snows, and they talk about simplifying.

Veteran Advisor
Posts: 4,126
Registered: ‎05-13-2010
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Re: Floor Talk, November 8, 2018 (Report Day)

SW  -  spot  ON   -  -   -

 

Seems  interesting  how  the  eXperts  have  all  of  the  world  wide  info  now  -  while  less   than  a   decade  ago ,  WE  were  burdened  with  feeding  the  world  -   -   -

 

STILL   -  Waiting  on   a   new'www   jingle,  cause  2050  starvation  time  clock  is  a ticking  -   -   -   

Veteran Advisor
Posts: 4,126
Registered: ‎05-13-2010
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Re: Floor Talk, November 8, 2018 (Report Day)

92  -  define  rational   ?