USDA Confirms Huge Grain Supply
On Friday, the USDA released its January crop reports and confirmed the huge grain supplies across the globe. Starting with corn, they raised the final yield on the crop by 1.2 bpa up to 176.6, which is a new record and larger than expected. However, they did reduce harvested corn acres by 400,000 acres down to 82.7 M and they did reduce planted acres down by 200,000 acres down to 90.2 M. On the demand side, they left exports and corn used for ethanol unchanged from last month. They also pegged the December 1st corn stocks at 12.516 B bu which was larger than expected. When the dust settled, corn ending stocks increased by 25 M bu up to 2.477 B bu. This is a tremendous amount of corn and March corn futures made a new low on the news, trading down to $3.45 ½.
On beans, the situation was not quite as bearish. The USDA left the harvested acres unchanged, but reduced the yield by .4 bpa down to 49.1 bpa. They did increase the amount of beans used for crush by 10 M bu but they did decrease the amount of beans exported out of the country by 65 M bu down to 2.160 B bu. Even though we did see a yield reduction and an increase in crush, these gains were more than offset by the decrease in exports. Dec 1st bean stocks came in at 3.157 B bu, which was slightly supportive. When the dust settled, bean ending stocks increased by 20 M bu up to 470 M bu.