This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Corn, wheat and soybeans have traded mostly sideways to lower this week after absorbing the double hit from the bearish surprises in the USDA reports. There is still a lot of chatter about USDA’s increase in corn yields. We do not often hear about debates within USDA about the numbers on a report, but this week it has been reported that a meeting was held to update top USDA officials and provide more transparency into Nebraska’s corn crop estimate. USDA raised yield by 11 bushels in Nebraska despite decreases in per-acre ear counts. While USDA’s official estimate will not be revised as a result of this meeting before the November report, at best, we can get some transparency as to how that change was made. Anecdotally, as we see yield reports coming in across the country, corn yield is up and down. That calls into question USDA’s surprise increase. However, bean yields continue to come in very good. That leads to the possibility of an increase in soybean yields in the November report.
It was widely reported this week that China has bought between eight and 10 cargoes of soybeans since Xi’s visit to the U.S. We saw one flash sale reported on Wednesday and more on Thursday, but are waiting to see more to know exactly how much was bought. A Chinese official threw cold water on the thought that they would be buying U.S. corn this year, saying their corn production was up and they would need to import less corn this year and U.S. corn is still not competitive. His estimate of corn imports was lower than the Chinese government’s official estimate. As with everything related to the Chinese, watching what they do is way more important than listening to what they say. We do not know if that particular official is telling the truth or just trying to move the market. Only time will tell. Beans were not able to rally much on the new sales to China this week due to harvest pressure and the NOPA crush report out on Thursday. The NOPA crush report shows U.S. crush was lower than expectations and less than last year. It was the first time in 18 months we have not set a new record monthly crush. It is not a lack of demand for meal or oil, but it was a lack of available soybeans that caused the miss. So next month should offset that when we see October crush.