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USDA Report Sends Soybean Prices Higher, Planted Wheat Acreage Lowest Since 1909


Soybean futures soared Thursday after a bullish USDA report pushed production estimates lower than expected.

The report was also bullish for wheat, with U.S. farmers slashing winter wheat plantings by 3.754 million acres to 32.383 million acres, the lowest in more than a century, according to Reuters. Analysts had been expected winter wheat plantings of 34.139 million, a Reuter survey showed.

January soybeans soared 29 cents, closing at $10.32 on lower production and yield numbers. USDA also cut soybean ending stocks by 2.355 billion bushels 420 million bushels. Chicago March wheat rose 7 2/5 cents at $4.26 1/5 following the report.

March corn rose 1 cent to $3.85 1/4 following the release of a slew of reports that included the World Agricultural Supply and Demand Estimates and Crop Production Annual Summary. USDA also released , Quarterly Grain Stocks and Winter Wheat Seedings.

Rich Nelson, chief strategist of the marketing firm Allendale in McHenry, Ill, said the slightly bullish report lifted soybeans, but “didn’t change the big picture.”

“There are two big-picture bullet points. Soybean production revised down due to both a revision lower in acreage,” said Nelson, “and dropped yields, which was a surprise for all of us.” The report also kept soybean exports unchanged.

“This does give us a moderate bounce for today maybe tomorrow but it does not change the big picture, which still is a generally bearish outlook,” Nelson said.

Corn production dropped slightly, “which was kind of expected, due to lower acreage. The trade was talking about a drop in yields as well ” Nelson said.

USDA raised corn ethanol and dropped corn feed residual by 50 million bushels. “The positive part is that the corn for ethanol more than offset lower feed residual numbers,” Nelson said.

Randy Martinson, an analyst with Martinson Ag Risk Management said the drop in wheat acres was also larger than expected.

“Everyone was anticipating a drop in winter wheat acres, but we didn’t expect this big of a drop,” he said. “You’d have to say wheat is bullish, corn is somewhat neutral and soybean was a little negative. That’s how todays’ report looked.”

Although the WASDE report was “friendly to soybeans, with ending stocks lowered to 420 million bushels, it still isn’t likely to push soybeans above a $10 range, according to DuWayne Bosse of Bolt Marketing in Britton, S.D.

Bosse said the report was “neutral for corn,” with concern about reduced wheat acres being replanted with corn. “The report confirmed we have a ton of corn, and one other negative thing those winter wheat acres, will get planted to something, which is why you see November soybeans are not rallying as high as March soybeans,” he said.

“As far as wheat goes, there might need to put a little premium because there are less acres than expected,” he added.

Another analyst, Mike Zuzolo, president of Global Commodity Analytics. based in Atchison, Kan. said the corn and soybean yield reduction “helps revive the South America weather market and promotes tightening cash basis for nearly-commercial elevators in my view.”

Here are the key numbers for the WASDE and Quarterly Grain reports:

Corn

Corn yield of 174.6 bushels per acre, which is less than the average trade guess, according to Reuters, of 175.1 bushels per acre.

Corn production of 15.148 billion bushels, which is less than the average trade guess of 15.196 billion bushels.

Corn ending stocks of 2.355 billion bushels, which is less than the average trade guess of 2.385 billion bushels.

Corn quarterly ending stocks of 12.384 billion bushels, as of Dec. 1

Soybeans

Soybean yield of 52.1 bushels per acre, which is below the average trade guess of 52.7 bushels per acre.

Soybean production of 4.307 billion bushels, which is less than the average trade guess of 4.374 billion bushels

Soybean ending stocks of 420 million bushels, which is below the average trade guess of 468 million bushels.

Soybean quarterly grain stocks of 2.895 billion bushels.

Wheat

Wheat ending stocks of 1.143 billion bushels million metric tons for 2016, which is slightly more than the trade guess of 1.41 billion bushels.

When quarterly wheat ending stocks were 2.073 billion bushels as of Dec. 1, up from 1.746 billion a year earlier.

2016 corn and soybean production and yield totals for selected states:

Illinois: Corn: 2.256 billion bushels, compared to 2.013 billion in 2015; average yield of 197 bushels per acre, compared to 175 last year; Soybeans: 592.95 million bushels, compared to 544.32 million in 2015; average yield of 59 bushels per acre, compared to 56 last year

Indiana: Corn: 946.310 million bushels, compared to 822 million in 2015; average yield of 173 bushels per acre, compared to 150 last year; Soybeans: 324.3 million bushels, compared to 275 million in 2015; average yield of 57.5 bushels per acre, compared to 50 last year

Iowa: Corn: 2.741 billion bushels, compared to 2.506 billion in 2015; average yield of 203 bushels per acre, compared to 192 last year; Soybeans: 571.725 million bushels, compared to 553.7 million in 2015; average yield of 60.5 bushels per acre, compared to 56.5 last year

Michigan: Corn: 320.28 million bushels, compared to 335.34 million in 2015; average yield of 157 bushels per acre, compared to 162 last year; Soybeans: 104.03 million bushels, compared to 98.98 million in 2015; average yield of 50.5 bushels per acre, compared to 49 last year

Minnesota: Corn: 1.544 billion bushels, compared to 1.429 billion in 2015; average yield of 193 bushels per acre, compared to 188 last year; Soybeans: 393.75 million bushels, compared to 377.5 million in 2015; average yield of 52.5 bushels per acre, compared to 50 last year

Missouri: Corn: 570.5 million bushels, compared to 437.36 million in 2015; average yield of 163 bushels per acre, compared to 142 last year; Soybeans: 271.46 million bushels, compared to 181.035 million in 2015; average yield of 49 bushels per acre, compared to 40.5 last year

Nebraska: Corn: 1.7 billion bushels, compared to 1.693 billion in 2015; average yield of 178 bushels per acre, compared to 185 last year; Soybeans: 314.15 million bushels, compared to 305.66 million in 2015; average yield of 61 bushels per acre, compared to 58 last year

Ohio: Corn: 524.7 million bushels, compared to 498.78 million in 2015; average yield of 159 bushels per acre, compared to 153 last year; Soybeans: 263.78 million bushels, compared to 237 million in 2015; average yield of 54.5 bushels per acre, compared to 50 last year

South Dakota: Corn: 825.93 million bushels, compared to 799.77 million in 2015; average yield of 161 bushels per acre, compared to 159 last year; Soybeans: 255.915 million bushels, compared to 235.52 million in 2015; average yield of 49.5 bushels per acre, compared to 46 last year

Wisconsin: Corn: 573.16 million bushels, compared to 492 million in 2015; average yield of 178 bushels per acre, compared to 164 last year; Soybeans: 107.25 million bushels, compared to 92.565 million in 2015; average yield of 55 bushels per acre, compared to 49.5 last year

Source: AgriMarketing

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