Chicago Grains Rebound Following Bearish USDA Report

12/08/16 -- Soycomplex: Beans closed lower, but not by much. The USDA surprised the trade with a 48.9 bu/acre national average soybean yield and estimated production at 4.060 billion bushels. The trade was anticipating a national average soybean yield of 47.6 bu/acre and US production of somewhere between 3.865 to 4.054 billion bushels. Apart from that change to the global supply and demand balance sheet most other items of note were left unchanged, with production in Brazil (103 MMT) and Argentina (57 MMT) unchanged along with imports (87 MMT) from China. World ending stocks were however raised more than 4 MMT to 71.2 MMT. The increase in US production more than offset a rise in their exports in 2016/17 to 53 MMT and ups ending stocks 1 MMT to 8.9 MMT. Aug 16 Soybeans settled at $10.03 1/4, down 19 cents; Nov 16 Soybeans settled at $9.81 3/4, down 2 1/4 cents; Aug 16 Soybean Meal settled at $332.90, down $1.00; Aug 16 Soybean Oil settled at 31.90, up 19 points. For the week nearby Aug 16 beans were down just 1/2 cent, Aug 16 meal was $2.90 lower and Aug 16 oil was up 138 points.

Corn: The market closed around a cent higher having been 9 cents lower at one stage. The USDA report came in bearish for corn, raising the 2016 average US corn yield to 175.1 bu/acre, with production at a record 15.153 billion bushels. Argentine 2016/17 corn production was raised from 34 MMT to 36.5 MMT and world production was upped from 1010 MMT to 1028 MMT. Glocal consumption was increased also, up from 1009 MMT to 1017 MMT, but ending stocks still rose to 220.8 MMT. The USDA have America taking a larger slice of the global export cake in 2016/17 at 55 MMT versus 52 MMT previously. Brazil's share will drop 1 MMT to 19.5 MMT, although Argentina's will rise 0.5 MMT to 23.5 MMT, they predicted. The weekly Commitment of Traders report showed managed money adding another 32,645 contracts to their net short position taking that up to -137k lots. Sep 16 Corn settled at $3.22 1/4, up 1 1/4 cents; Dec 16 Corn settled at $3.33, up 1 1/4 cents. For the week Sep 16 corn was down 2 cents.

Wheat: The wheat market closed higher. The USDA raised US all wheat production to 63.2 MMT from 61.5 MMT previously and sees 2016/17 exports up from 25.0 MMT to 25.5 MMT. European production was dropped 9 MMT from last month to 147.5 MMT. However increases from Russia (up 7 MMT to 72 MMT), Ukraine (up 2 MMT to 27 MMT), Australia, Canada and Kazakhstan all countered the lower EU output to put the world crop almost 5 MMT higher this month at 743.4 MMT. Consumption is seen up 3 MMT to 723.5 MMT. Ending stocks were lowered nearly 1 MMT from 253.7 MMT to 252.8 MMT but still remain at record large levels. EU exports were cut from 34 MMT to 27 MMT, and Russia's raised from 25.5 MMT to 30 MMT, making them the world's leading supplier of the grain. Sep 16 CBOT Wheat settled at $4.22 1/2, up 6 1/4 cents; Sep 16 KCBT Wheat settled at $4.16 1/4, up 4 cents; Dec 16 MGEX Wheat settled at $5.16, up 6 1/2 cents. For the week overall, Chicago wheat ended with net gains of 6 1/2 cents, Kansas wheat was up 4 1/2 cents and Minneapolis added 13 1/4 cents.