This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Friday’s catch-up USDA report did not offer a lot for the bulls. USDA did lower corn yield, but not nearly as much as the market was hoping. It dropped corn yield seven-tenths of a bushel to 186.0 bushels per acre from 186.7 in the last report. The higher carry-in from the September stocks report more than offset the drop in production, and carryout was slightly higher at 2.154 billion bushels. Typically, we do not get another adjustment to yield until the January report. USDA still has some questionable numbers for feed and ethanol demand that look like a buffer for the possibility of further yield reductions in the January report. The market expects carryout to stay around the 2.1-billion-bushel level on corn.
On soybeans, USDA dropped yield by half a bushel to 53.0 from 53.5 per acre. That was about what the market was expecting, and carryout was reduced from 300 million bushels to 290 million. It was not the crop production estimates that caused the soybean selloff on Friday, but the export data that USDA released. The market was very disappointed by the amount of sales we have on the books to China and “unknown.” We had been told by the administration that China had committed to buying 12 million metric tons by the end of the year. This figure has never been confirmed by the Chinese side. According to the data released on Friday, they have less than a million metric tons on the books. And we know that Brazilian beans are cheaper now than U.S. beans even before you take into account the extra 10% tariff that has to be paid on U.S. beans. On Monday, the market came roaring back after we had rumors of China buying six to 10 cargoes of U.S. soybeans for May–June onward shipment. This sale will put them over a million metric tons, but still a long way from 12 million metric tons. Treasury Secretary Bessent and President Trump have both subtly switched the Dec. 31 deadline for the 12 mmt of beans and replaced it with the “season,” implying the entire marketing year.
I struggle to explain the market trading to new highs on Monday just based on a few cargoes of soybeans. The market is keenly aware that any purchases are for political posturing since South American beans are now offered cheaper, so maybe that has the market believing their intentions now. There could be some weather premium going into the market as well. While we do not see a major weather threat in South America, there are some dry spots. Current forecasts that we monitor show the dry spots filling in soon, but maybe the market is anticipating more risk.
The NOPA crush report came out Monday as well, showing record crush for October and higher than what the market was expecting. We should see record crush for each month this year as several new plants have come online.