Going into the November World Agricultural Supply and Demand Estimates release earlier this week, the market had prepared for a big increase in soybean yields in the report.
That didn't happen, AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discussed on this week's Agweek Market Wrap, sponsored by Gateway Building Systems.
"They didn't increase it," Martinson said. "They dropped it more than anticipated, which really was friendly to the market."
Soybeans were up, and so was soybean oil and meal. The meal in particular showed the most strength, Martinson and Rook said.
Where the soybean market will go remains to be seen as a big South American crop is expected, and the WASDE did adjust U.S. exports lower.
The WASDE put corn at a record yield, but that was offset by an increase in ethanol production. Martinson said even though ethanol was down a little this week, it still was at more than 1 million barrels per day.
The strength in ethanol and gasoline demand is helping corn at a time when exports are "unstellar, to say the least," Martinson said. Ethanol is leading the corn market, because margins are good for ethanol plants.
"Ethanol plants are buying as fast as they can," Martinson said.
Rook said corn also got a push from soybean meal's strength, as well as the need to maintain corn acreage in the face of higher input costs for next year.
In wheat, Kansas City and Chicago took the lead, while all three markets were up. Minneapolis has been the leader lately, so why the change?
Martinson said the wheat classes can't get spread too far apart, plus there hasn't been much demand for Minneapolis wheat (or any U.S. wheat for that matter) and there are worries about production on the winter wheat side. Rook said the WASDE confirmed continuing tightening of wheat stocks globally.
Cattle's cash trade remains high, but the futures are disappointing. Martinson said that may be because beef is more expensive than other meat choices or because beef isn't typically a main holiday protein choice.
Hogs showed some strength this week, with cut out values gaining strength, Rook said. Martinson said holidays are a good time for pork demand, and hams in particular were up.