Welcome back to the D&D AG MarketMIX newsletter! This newsletter is exclusively for you - our D&D customers and associates. Our goal is to provide you with a monthly summary of the Ag market reports to keep you updated on relevant, vital news that may impact your business.

The October World Agricultural Supply and Demand Estimates report delivered another round of adjustments to US corn and soybean yields. Yield cuts were larger than expected and ending stocks for both products ended up tighter than forecasted.

USDA pegged corn yields at 173.0 bushels per acre, down slightly from 173.8 bpa in September and just below forecasts for 173.5 bpa. Reports from fields suggest conditions vary from place to place, with dryness over the summer denting yields in parts of the country. Still, overall output looks healthy, and USDA expects ending stocks to reach 2.111 billion bushels.

Soybean Yields and Stocks Lower Than Expected Due to Summer Heat

Meanwhile, soybean yields were adjusted to 49.6 bpa, down from 50.1 bpa the month prior and average expectations for 49.9 bpa. Ending stocks estimates came in at 220 million bushels, unchanged from September but below consensus calls for 233 million. Summer heat reportedly took a larger toll on soybeans, and the soy balance sheet is expected to stay snug, at least until we get more news on South America’s upcoming crop.

As harvest continues, a few factors will bear watching. First, Mississippi River levels could hinder the movement of grain across the US as levels drop to record lows for a second consecutive year. Shippers are already loading less weight on barges, causing an uptick in basis along the river.

Crude oil markets will also be a watch factor. Oil prices rose this month as war broke out in Israel, and concerns are mounting that conflict could spread regionally. Higher crude markets often offer support to soy prices and can push corn upward as refiners pivot to cheaper fuel sources. However, reports suggest US fuel prices will be relatively unaffected.

And while lawmakers reached an agreement to avert an October 1 shutdown, a new deadline is looming. Officials have until November 17 to pass a budget, a feat that could prove difficult without a Speaker of the House. If the government shuts down, USDA reports, including Crop Progress and WASDE, will be suspended. Processing work around risk management programs – such as Dairy Revenue Protection and crop insurance – could also halt. 

Amid the uncertainty in grain and feed markets, dairy producers could experience some much-needed relief from higher milk prices. Dairy Margin Coverage estimates place the fourth quarter “all milk” price above $21 per hundredweight, up from just over $19 in Q3.

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

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