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WASDE Report surprises soybean market

The monthly World Agricultural Supply and Demand Estimates Report holds plenty of changes during harvest time. Actual yields are known for spring crops like soybeans, corn, oats, etc. And the market has plenty of news to trade on with weather forecasts, private estimates from firms like Informa and news stories from around the country. So the October report has a lot of attention on it and provides direction for the last month of the crop cycle.

In this report from the U.S. Department of Agriculture, the markets were largely not impacted by the government's estimates. The big exception was the soybean balance sheet, where yields were taken down unexpectedly. The nearby contract was up almost 20 cents following the report's release on Thursday.


Wheat prices are ticking back to old lows this week. The U.S. and Canada are well supplied overall. But the global market has plenty of wheat, too, keeping pressure on the markets. The USDA showed a slight increase in ending stocks for U.S. wheat, while the global balance sheet was tighter. More important to the wheat market is the change in corn. Stocks for U.S. corn were left mostly unchanged, but yields increased to above 170 bushels per acre.


Durum prices have not changed much in the last few weeks. Lower production is known from the weather problems through the summer in the Northern Plains. But as the overall wheat market has declined through the end of the summer and early fall, durum has followed that path lower. The market is comfortable for the time being, settled above the previous lows that held for over a year.


The canola market has been quiet. Trades have been based more on currency fluctuations (strength in the Canadian dollar has provided some pressure) and positioning ahead of the USDA report than on more traditional fundamental drivers. Demand and usage remain strong for canola, but the market is wary of pricing itself out of competition with other fats.

Therefore, traders have been watching the Chicago soybean oil market closely. That market has been moving mostly sideways for the last week as well. Prices had dipped to a near-term low on the news of U.S. Environmental Protection Agency taking comments on adjusting the biofuels policy. Speculation on the outcome of those comments have ruled the day. On one hand, the U.S. president's base is made up largely by the farming community that may be negatively impacted by any reduction to biofuels mandates. On the other, Trump has appointed a former fossil fuel executive to head the EPA and may be looking out more for the interests of that party.

Peas and lentils

There has been little change in the global field pea market. Prices have been steady to lower in the last week. Some concerns are mounting for exporting to India, as non-compliance penalties are being faced by importers if pulse shipments from Canada are not fumigated. This is leading to some demand forecast questions for the industry.


Light news for mustard seed this week. Exports are off to a normal pace in Canada, with shipments to the U.S. in line with a year ago.


This month's WASDE Report took barley stocks for the 2016-17 crop year lower. This reduction was offset by a small increase in new crop production in the U.S. Yield rose to 72.6 bushels per acre from 72.1 in the September report.