WASDE report indicates spot on estimates
CRESTWOOD, Ky. -- The October U.S. Department of Agriculture report for World Agriculture Supply and Demand Estimates typically holds a lot for the market. This period is when the reality of harvest yields begins to merge with earlier yield forec...
CRESTWOOD, Ky. - The October U.S. Department of Agriculture report for World Agriculture Supply and Demand Estimates typically holds a lot for the market. This period is when the reality of harvest yields begins to merge with earlier yield forecasts.
Before the report, the market was expecting a small drop in corn yield and a modest increase in soybean yield. Both of these came in right at expected levels, so the market reaction was limited. Soybeans (along with meal and oil) saw modest support on higher demand. Wheat stocks in the U.S. remain comfortable, and these markets followed direction from soybeans and corn.
Wheat markets continue to move in a sideways direction. It is clear the U.S. and Canada are well-supplied heading into the winter.
The WASDE report showed a boost in stocks from the September report, even with a modest production cut. Lower feed usage resulted in a boost of 28 million bushels to ending stocks, returning to 50 percent of total usage.
Winter wheat planting in the U.S. is progressing on schedule.
In its weekly report, USDA showed 59 percent of the crop planted compared to last year and the five-year average pace of 60 percent. Conditions of the crop are not yet being reported, as most has not emerged. But, there were minor concerns that recent dryness in the Southern Plains might be impacting the crop, yet soil moisture reserves are plentiful and the area is far from drought conditions.
The durum market was unchanged from a week ago. While prices are off from lows hit during the summer, major support has not come and the market is still very near the bottom.
Canola prices have been firmer. Slowed harvest as a result of rain in Canada and the Northern Plains are raising some quality concerns.
Supplies are still expected to be adequate, but the recent weather is supportive. Also adding to support is higher prices in palm and soybean oil following some weakness last week.
Peas and lentils
There is mixed news for the pea and lentil markets. Pea export movement has been strong, lending some support to prices. On the other side, lentil conditions might be better than feared because of late-season rain in Canada.
Some samples submitted by farmers to the Canadian Grains Commission have suggested a larger portion of the crop might be graded higher than expected. The relatively small sample size from Canada's growing regions showed a higher quality than many feared (28 percent graded No. 1 and 35 percent graded No. 2).
Price pressure has come for mustard seed as unofficial reports say the Canadian crop is larger than previous estimates.
The initial estimate for 2016 to '17 production from Statistics Canada was 234,000 metric tons, but yield estimates suggest total production might be near 280,000 metric tons. Final output figures will not be released until the official report by Statistics Canada in December.
In the WASDE report, USDA increased barley production. Yield climbed to 77.9 bushels per acre from the September estimate of 73.6 bushels per acre. This increase led to a 9-million-bushel increase in total supplies.
Lower exports and higher feed usage resulted in a boost to ending stocks up to 98 million bushels.