This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

Yesterday, Thursday, Oct. 9, we were supposed to get the USDA October Supply and Demand report. Due to the government shutdown, it has been delayed officially, but in all likelihood it will be canceled. This was the first report in which USDA would have incorporated actual harvest data in the yield projection. The surveys were still conducted to get the trade estimates for the report, so we do have market expectations for what the report would have said. The market was expecting more cuts to corn yield from 186.7 on the last USDA report to 184.8. No further changes in acres were expected (but to be fair, they were not really expected the last two times USDA changed them). That lowers total corn production by around 200 million bushels. However, despite lower production, the market expected a slight increase in carryout due to reductions in demand — most likely on the feed demand side and possibly ethanol. Ethanol production has been a bit slow to start the crop year, but there is still time to catch up. USDA had a pretty high feed usage number that could be trimmed a bit.

The market was expecting a very slight reduction in yield on soybeans. Yield reports in the Midwest have been more mixed on beans than corn, with some yields coming in better than expected and some lower. Some of the disappointment in yields on beans is coming from lower moisture levels. There are a lot of beans in the Midwest being cut at single-digit moistures. The slight reduction in yield does not change production much on beans, and the market was expecting a very slight increase in carryout due to decreasing demand. Up until the government shutdown, there were still zero soybean purchases by China. Since we do not have flash sales reported while the government is not operating, we do not know if there have been any since then. Gulf basis jumped higher, and there are market rumors of some decent-sized purchases being made in the last week. Some are saying China is one of the buyers, but I’m skeptical. They appear to be using soybean purchases as one of their main points of leverage, so I would expect them to try to hold out until there is some progress on trade.

It has been another very slow week in the markets, as you can tell by the fact I spent so much time talking about a report that did not come out. This week last year, nearby corn traded from $4.20 to $4.235, and nearby November beans traded $10.115 to $10.2725. That is almost the exact same range we have traded in corn and beans this week. Without USDA data, the market will pay closer attention to private estimates and is looking forward to South American weather. Brazilian planting is moving along quickly, even though some areas are on the dry side. The forecast is for many of those dry areas to receive rain this weekend. It will be a few weeks yet until the market starts getting concerned if we have not seen the start of the monsoonal rains. Corn is still trying to work higher but cannot get any help. Beans are still trying to figure out if China is going to buy any U.S. beans. Harvest is still progressing rapidly in the Midwest with no rain to slow it down.