The USDA supply and demand balance sheets for November contained few shocking numbers for corn. Production now stands at 12.31 billion bushels, a 130 million-bushel reduction from October. This was from a 1.4-bushel reduction in yield, as acres were left unchanged.

Even with the lower production, corn carryout climbed 48 million bushels, to an 843 million-bushel total, because of a 100 million-bushel reduction to feed demand.

For soybeans the data were a little more negative. Production was reduced a minimal 14 million bushels from a 0.02 bushel per acre cut in yield. Soybean exports were cut a large 50 million bushels, though, which was enough to cause a build in ending stocks.

This leaves projected soybean carryout at 195 million bushels, 35 million more than October’s estimate.

Wheat carryout dropped from 862 million bushels in October to a current estimate of 828 million from a reduction to harvested acres, but this total is still 9 million bushels more than trade expected.

It would not be surprising to see another reduction to corn yield in January’s final production report adjustments. In the past 26 years the USDA has lowered corn yield from October to November nine times, according to Advance Trading. In seven of these years, final corn yield was reduced by an average of 1 bushel per acre.

For soybeans, there is no clear pattern of changes in the January release.

Harvest is starting to wind down across the United States for another season. As it does, the focus shifts to farm-stored grain and what producers will likely do with it. Many are opting to store grain rather than sell it, which is made possible by the large amount of revenue that was deferred from last year’s elevated grain bids and forward sales.

Depending upon what method farmers use to store this grain, it could also keep stocks out of commercial inventory and squeeze the cash grain market. Internal grain buyers are aware of this potential situation, and are taking measures to try to maintain a steady flow of deliveries.

Many terminals and processors alike have already allowed corn and soybeans to be stored free of charge to secure ownership. Others have started to take forward-contracted grain for early delivery. While these actions may secure some immediate ship grain, they may just be prolonging what buyers end up paying for movement later on.

Land values across the United States still seem to be a solid investment, but how much of a good thing depends heavily upon where the land is located. Land in Indiana, Minnesota and Wisconsin is the best investment, according to several economists. Conversely, land in the Delta region is the poorest in which to invest.

Economists also believe in the not-so-distant future, $8,000 per acre land will look cheap regardless of where it is located.

China has slid past Canada to become the United States’ largest buyer of farm products. In the marketing year that ended Sept. 30, China’s ag import bookings from the United States totaled $20 billion. This is a considerable jump from the $6 billion in trade between the U.S. and China as recently as 2004.

The total of all U.S. exports for the last marketing year reached $137.4 billion – and are expected to be nearly the same this year.

Brazil is set to pass the United States as the world’s leading soybean exporter. Buyers have been showing more interest in Brazilian soybeans because of price, and now quality issues may push additional customers in that direction. Brazil has more room to expand its soybean production, which will also make it more of a global choice for needs.

While the United States has basically tapped out soybean plantings at 80 million acres, Brazil has 173 million acres of prime ground it can easily add to its current 60 million acres of production.

Karl Setzer is a Commodity Trading Advisor/Market Analyst at MaxYield Cooperative. His commentary and market analysis is available daily on radio, in newsprint and on the Internet at www.MaxYieldCooperative.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate.

This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.