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The November World Agricultural Supply and Demand Estimates report typically holds few changes, as USDA pauses revisions before harvest finishes. This year, however, was an exception – at least for corn balance sheets.

The latest WASDE increased US corn yield estimates to 174.9 bushels per acre, up from 173.0 bpa in October and above average consensus calls for 173.2 bpa. That took production estimates to a robust 15.234 billion bushels, while forecasts for ending stocks jumped to 2.156 billion bushels. World ending stocks estimates were also adjusted upward to 314.99 million metric tons, ahead of industry expectations.

At the same time, USDA adjusted US corn demand higher. Ethanol usage added 25 million bushels month-to-month, while exports rose by 50 million bushels. Still, given healthy yields, production and stocks, there’s more than enough corn to meet those needs.

Soybean Yields and Stocks Rise Slightly in November WASDE Report, but South America's Weather Poses a Risk

Meanwhile, the WASDE held fewer changes for soybeans. Yields were pegged at 49.9 bpa, up slightly from 49.6 bpa in October and just ahead of forecasts for 49.6 bpa. That helped take forecasts for ending stocks to 245 million bushels, up from 220 million last month and consensus calls for 222 million. World ending stocks came in at 114.51 million metric tons, within expectations.

USDA also made minimal adjustments soybean demand. But that could change in the coming months as worries mount around South America’s crops. While Argentina is reportedly receiving some much-needed rain, dry conditions are delaying planting in Brazil and could dent yields. If hot weather lingers and cuts into Brazil’s harvest, global buyers may turn to the US for more of their soybean needs.

Basis values bottomed out in July and August as the domestic crop began to show signs of severe drought stress. They’ve held about $15 per ton above the lows since then and are poised to move higher still should South American growing conditions continue to be poor. Chinese buyers stepped into US markets, making several large purchases to start the month of November. While the export pace is still behind USDA projections, this is another supportive factor for cash values.

Another key watch factor in the months ahead: war in the Middle East. While Israel isn’t a major supplier of crude oil, worries that the conflict could spread regionally have global oil markets on edge. Not only do grain prices tend to follow crude, producers could find themselves paying more for fuel if oil jumps higher. 

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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