Chicago Beans End Lower As USDA Projects Record Yields

12/09/16 -- Soycomplex: Beans closed lower following a bearish USDA report that projected 2016 US soybean yields at a record 50.6 bu/acre. They put production at an also record 4.2 billion bushels. Trade ideas were for the USDA to reveal a 49.3 bu/acre yield, with US production at 4.1 billion bushels. It wasn't all bearish, they did cut old crop ending stocks to 195 million bu versus an average trade forecast of 232 million. "The USDA has lowered 2015/16 carryout 155 million bushels in the last two reports and a whopping 305 million from its first estimate of 500 million way back in May 2015," noted Benson Quinn. New crop 2016/17 carryout was however left at the highest level since 2007/08 - 365 million bushels, they added. Brazil's 2016/17 soybean crop was cut 2 MMT to a still record 101 MMT, Argentina's was left unchanged at 57 MMT. China's import needs were trimmed 1 MMT to 86 MMT. Global ending stocks were up 1 MMT to 72.2 MMT. In other news, weekly export inspections were strong once again at 948,570 MT. After the close the USDA left crop conditions unchanged at 55% good and 18% excellent. The proportion of the crop dropping leaves was 26% against 25% normally. Sep 16 Soybeans settled at $9.84 1/2, down 12 3/4 cents; Nov 16 Soybeans settled at $9.64 1/4, down 16 cents; Sep 16 Soybean Meal settled at $318.30, down $5.00; Sep 16 Soybean Oil settled at 32.31, down 72 points.

Corn: Corn closed with small losses. The USDA put US corn production at 15.093 billion bushels on a 174.4 bu/acre national average yield. The average trade guess was a bit lower than that. Ending stocks were placed at 2.384 billion bushels versus the average trade guess of 2.329 million and 2.409 million in August. Brazil's 2015/16 corn crop was lowered from 68.5 MMT to 67 MMT, but their 2016/17 crop was increased from 80 MMT to 82.5 MMT. China's 2016/17 harvest came in 2 MMT lower than last month at 216 MMT. World 2016/17 carryout was down a little from 220.8 MMT to 219.5 MMT. US exports in 2016/17 were unchanged at 55 MMT, Brazil's were raised from 19.5 MMT to 20 MMT and Argentina's upped from 23.5 MMT to 25 MMT. After the close the USDA left US corn crop conditions unchanged at 74% good to excellent. In their first harvest progress report of the season they have the crop at 5% cut versus 7% normally. They said that 33% of the crop is mature (32% normally) and 87% dented (82% typically at this time). Customs data shows that Brazil imported 295 TMT of corn in August with 170 TMT coming from Paraguay and 125 TMT from Argentina. Taiwan tendered for 65,000 MT of US/Brazilian corn. Agritel placed the 2016 French corn crop at 12.5 MMT. Weekly export inspections came in at 1.343 MMT. Sep 16 Corn settled at $3.29 1/4, down 3/4 cent; Dec 16 Corn settled at $3.39 1/2, down 1 1/2 cents.

Wheat: Wheat closed higher as a mildly friendly USDA report triggered some short-covering. World ending stocks were lowered from 252.8 MMT to 249.1 MMT versus trade expectations of a more marginal drop to 251.4 MMT. This was the third monthly reduction in a row. US ending stocks were however unchanged from last month, at 1.1 billion bushels. "Global production in 2016/17 is raised to a new record. Larger crops in Australia, Brazil, Canada, India and Kazakhstan more than offset lower production in China and the EU," they said. "Exports are raised for Australia, Brazil, Kazakhstan, Serbia and Ukraine and lowered for the EU. US imports and exports are unchanged. The US season-average farm price is lowered 10 cents to $3.60 per bushel," they added. The global crop was placed at 744.8 MMT, some 10 MMT up on a year ago. Production in Russia and Ukraine was unchanged at 72 MMT and 27 MMT respectively, but Kazakhstan was increased 1.5 MMT to 16.5 MMT. Russia's export potential was left unchanged at a record 30 MT, but Ukraine's and Kazakhstan's were increased 0.5 MMT each to 15 MMT and 8.5 MMT respectively. In other news, the Canadian Wheat Board said that Canadian wheat exports for the first five weeks of the marketing year were down 32% at 1.287 MMT. The USDA placed the 2016 US spring wheat harvest at 94% done versus 86% typically at this time. Weekly export inspections were 720,436 MT, up 12% from a week ago. Sep 16 CBOT Wheat settled at $3.83 1/4, up 7 1/4 cents; Sep 16 KCBT Wheat settled at $3.99 3/4, up 6 1/4 cents; Sep 16 MGEX Wheat settled at $4.99 3/4, up 1 1/4 cents.