On Friday, corn finished 17 1/2 higher, with December futures ending the week at 3.97 3/4, up 13 for the week. November soybean futures gained 12 1/2 today, finishing at $9.36, up almost 20 for the week.
The initial BIG story this week was the USDA’s WASDE report on Thursday, which gave us a mixed bag of data between corn and soybeans. The USDA left the corn production almost unchanged and are now estimating 13.779 billion bushels of corn. They made a slight decrease in harvested acres but took yield up slightly as well. The net effect of the two changes was to decrease production by about 20 million bushels. They also adjusted demand a little, with exports down 150 million and ethanol usage down 50 million. However, ending stocks for 2019/20 are estimated to be about 260 million bushels lower, at 1.929 billion. So, the really BIG change was that they decreased BEGINNING Stocks by over 300 million by increasing feed and residual last year by 343 million.
Soybeans were a slightly different story, with acres and yield both decreased resulting in a drop from 3.633 billion bushels to 3.55 billion, which is 83 million bushels less than their September estimate. They also made an adjustment to beginning stocks here, by reducing last year's production. So after all of that time we’ve spent talking about ending stocks for 2018/19 being at or above 1 billion, the USDA now says it is 913 million. This pushed 2019/20 ending stocks to 460 million vs. the 640 million we saw in September.
After the close today, there have been several reports coming out that the U.S. and China reached a partial agreement. Supposedly, the U.S. agreed to hold off on scheduled increases in tariffs on billions of dollars of Chinese goods in exchange for China expanding purchases of American goods, including agriculture products. China is expected to make between $40 billion and $50 billion in agriculture purchases. In exchange, the U.S. has agreed not to raise tariffs on $250 billion of Chinese goods from 25% to 30%. The two sides are expected to meet again in Chile in the next couple of months, according to press pool reports.
We’ll see where this all shakes out over the weekend and into next week.
Keep in mind that Monday is Columbus Day. Grain markets will operate as normal, but the Federal Government is on holiday, so no mail and no regular Monday reports. Those will be issued Tuesday.
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