Soybean prices rally after USDA data dump

Soybean prices rally after USDA data dump

Today's USDA data dump was, for the most part, within the trade expectations and provided little fireworks for the grain markets. Corn production estimate lowered 30 million bushels from 13.585 down to 13.555 billion bushels on harvested acres being lowered by -437,000 and a rise in yield from 167.5 to 168.0 bushels per acre. Exports, ethanol and feed usage for new-crop all left unchanged. Bottom line: Yield a bit higher than the trade was thinking, but acres were lowered a bit more than most were anticipating. Net-net a 31 million bushels slight reduction in ending-stocks.

Global corn reserves lowered a bit further than most had expected but nothing that's exciting the trade. Global corn production for 2015/16 was actually lowered by 5.5 million tons with reductions for Ukraine, Argentina, India, Philippines, and several Sub-Saharan African countries more than offsetting an increase for Brazil. The 2015/16 season-average corn price received by producers is projected 5 cents higher on both ends to $3.50-4.10 per bushel.

Soybean production estimate was lowered by 47 million bushels from 3.935 billion down to 3.888 billion bushels on harvested acres being reduced by -1.1 million and yield being raised slightly higher from 47.1 to 47.2 bushels per acre. The trade found the acreage reduction very favorable and pushed soybean prices 14¢ higher before selling off to just 4¢ higher.  It is somewhat positive that beans stayed in the green even with massive global production numbers thrown out today.  

Soybean exports were lowered by 50 million bushel, while domestic crush was raised higher by 10 million bushels. Net-net, estimated ending stocks were lowered by 25 million bushels. The average soybean price is projected at $8.40-9.90, unchanged from last month. Keep in mind 2016 global soybean production is projected at another record high of 320.5 million tons. Brazil's new-crop estimate was bumped to a whopping 100 million metric tons.

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TAGS: Soybeans
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