The long awaited November Crop Production and Supply and Demand report is out and like most major reports there were a few surprises in it. For the most part though this report confirmed pretty much of what the trade was expecting. First, the report did show a reduction in planted acreage for corn and soybeans, with corn acreage down 2% from the September report and beans down 1%. However, because of the yields, we are still looking at very strong production numbers.
In their November Report the USDA is calling for an all time record corn crop just shy of 14 billion bushels and the third largest soybean crop on record at 3.26 billion bushels. With these large numbers one might think this report would be considered bearish, but in a conversation with market analyst Todd Hultman of DTN, he sees it as a split reaction, somewhat bearish for corn but bullish for beans
In the report, corn ending stocks were projected to be up 130% over the 2012-2013 figure at 1.88 billion bushels. As a result the USDA has lowered its average corn price estimate for 2013-14 to $4.50 a bushel. Ending stocks for soybeans are now forecast at 170 million bushels, up from the September estimate and so too, the average bean price estimate for 2013-14 was lowered to $12.15 a bushel.
The report was also somewhat bearish for wheat with production estimates and carryover up from September numbers. This resulted in the USDA lowering its average wheat price estimate to $7.00 a bushel. Many in the trade feel these number are pretty accurate because of the intense leg work done to file the report and the large number of farmer interviews conducted. if in fact these numbers do stay in tact, the news will be good for livestock producers, especially beef producers who were hoping to see a decline in feed costs.