CRESTWOOD, Ky. - Many have covered the U.S. presidential election and the potential impact on agriculture. While direct farm policy is not likely to change dramatically with a Trump presidency, the broader implication will be the future of trade relationships and general economic performance. The day following the election, stocks were down significantly before regaining much of the overnight losses.
On Nov. 9, the U.S. Department of Agriculture put out its November crop estimates for supply and demand. In its monthly World Agricultural Supply and Demand Estimates Report, an unexpected jump in soybean and corn yields pushed the entire grain market lower. With huge supplies of those commodities and burdensome wheat stocks in the world, it was difficult for the market bulls.
An unexpected and welcomed break in the rain has affected Canada's harvest situation and allowed some harvest progress for the remaining crops. Many areas were not expected to get any relief, which would have left crops in the field until frozen, or until spring.
Wheat
Wheat markets moved modestly lower from last week, and USDA's report held little excitement for the U.S. balance sheet. Global stocks increased marginally on lower demand, but the biggest pressure for the wheat market has been the dip in corn. The WASDE report showed a surprise increase in corn yield to an incredible 175.3 bushels per acre. The market had expected a corn yield reduction, so this put pressure on all grains following the report's release. Globally, the export price of wheat has been on the rise with Russian export markets up for a seventh consecutive week. On the other side, because of weak output, French soft wheat exports are at a nine-year low.
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Durum
In the WASDE report, USDA took down durum use modestly. This change had little impact on prices that have held steady for the past several weeks.
Canola
The canola market has tracked with the wild swings in the soybean oil market. Soybean oil is off the previous highs, but has seen big swings as fund involvement pushed the net-long position to a new record. But, the outlook for a much larger soybean crop put significant pressure on the soybean complex and took prices down a full cent per pound on report day.
On its own, the canola market has to realign after improvements in the weather that are allowing farmers to complete harvest. Major delays in October raised fears of significant crop damage to the last 20 percent of the crop that was still in the field. Many expected that portion to stay in the field until a solid freeze, or even the spring. But, the recent warm and dry weather is allowing farmers to get into the fields and get the canola crop out. While some damage to quality has been done, it is likely not as bad as previously feared.
Peas and lentils
USDA's monthly report also showed updated production data for U.S. peas and lentils. The report confirmed a huge bump in output on higher area for 2016: lentils climbed to 564,100 metric tons from 239,300 in 2015.
Canadian lentil exports have been off to a slower start this year. This pace is not an indication of weaker global demand (which continues to be strong) but a reflection of slow harvest in Canada from rain. Statistics Canada data shows a dip of 22 percent to 325,800 metric tons.
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Mustard
Export progress for bulk mustard seed remains slow. Statistics Canada export data showed a decline from August to September to 17,300 metric tons from 19,000 metric tons the previous year.
Barley
USDA's monthly WASDE Report showed no change from the October estimates. Stocks are mostly unchanged from a year ago, with 2016 to '17 at 98 million bushels, compared to 102 million bushels from 2015 to '16.
