Friday’s combined World Agricultural Supply and Demand Estimates report along with its final Crop Production estimates for 2024 provided some surprises for corn and soybeans Brooks Schaffer is a market analyst with Pinnacle Marketing in Ridgeland, South Carolina.
“I think the lower end of the range on corn yield we were thinking we were, you know, we could see as low as 181.3 on the yield and 51.1 on beans. That was the low end of the estimates, and what USDA gave us was 50.7 and 179.3 and so that made some pretty significant changes on carry out. It takes corn carry out down to the 1.54 billion bushels and takes soybean carry out down to 380 million bushels.”
While he called corn and soybean numbers very friendly, he classified wheat as neutral in these reports.
“The carry out came out a little bit higher than last the last report, but on this January report, we get the winter wheat seedings, and so those came out a little bit higher than estimates, so wheat didn’t get the friendly bump that that corn and beans did. And honestly, the only reason that wheat is trading as strong as it is, I think wheat would have been down more, if not the strength in corn.”
Schaffer says, now analysts will be keeping an eye on South America.
“This was a big adjustment. I mean, 100 million bushels on bean carried out is a huge adjustment, but we can make that up depending on the weather in South America. We can overcome that on the world balance sheet. We can overcome that pretty quick based on the weather in South America. So the market is going to take a day or so here to readjust what our trading ranges are, but then we’ll go right back to trading weather. So that’s going to be the most important thing going forward on beans is what happens in South America going forward, and that will determine the direction over the next few weeks.”
As for farmers, he says, this is a gift, and they should take it.
“When we get a balance like this, it’s easy to pull back and say, I don’t want to sell anymore. You know, we’ve seen farmers selling at these levels, and I think we should continue to do that and continue to scale in here and make some sales as we get strength. It feels like a gift from beans here and I think we need to take some.”