BARRINGTON, Ill. – October’s World Agricultural Supply and Demand Estimates (WASDE) report and production numbers were considered friendly for soybeans, and slightly friendly for corn, according to a farm market expert analyzing the report, released Oct. 12.

“U.S. corn production was cut by 70 million bushels to 15.064 billion, below the trade’s expectations,” Jim McCormick, founding partner at AgMarket.net, farm division for John Stewart & Associates headquartered in Barrington, told Farm World. “The national average corn yield fell 0.5 bushels to 173 bushels per acre, a more significant cut than anticipated.”

He said the USDA’s soybean numbers had the biggest surprise of the day as the USDA reduced their soybeans production, estimated by 42 million bushels, to 4.104 billion, versus the trade expectations of a 12-million bushel cut.

“The U.S. average yield fell to 49.6 bushels per acre, tying last year’s yield,” he said. “History would suggest that further yield revision should be expected as the tendance (a natural or prevailing disposition to move, proceed, or act in some direction or toward some point, end, or result) is for further cuts to yield to follow cuts in the October report.”

He said the world soybeans ending stocks were revised down nearly 4 metric tons from the USDA September estimate, a more significant cut than anticipated.

“Year-on-year, the ending stocks are projected to increase 13.7 metric tons, which will mute the bullishness of the tight U.S. ending stock number,” he said.

Chad Hart, Iowa State University professor of agricultural economics, agreed with McCormick, saying, “This report was slightly bullish, as corn and soybean production figures came in lower than the average pre-report estimate.

“The trade was expecting slightly lower yields,” he told Farm World. “The USDA provides bigger cuts than anticipated. Also, it helped that the usage reductions were smaller than the production cuts, leading to lower stocks for corn.”

The U.S. soybean crush likely rose last month to a September record, while soy oil stocks were estimated to have thinned to the lowest in nearly nine years, analysts said ahead of a monthly National Oilseed Processors Association report.

According to National Oilseed Processors Association members, which handle about 95 percent of all soybeans processed in the United States, an estimated 161.683 million bushels were crushed last month.

When asked what the outlook is for the end of 2023 and going into 2024, Hart said, “The USDA put the 2023/2024 season average price estimates at $4.95 for corn, and $12.90 for soybean. Pre-report, market prices had been trading below those levels.

“The report and the subsequent information on soybean crush from the National Oilseed Processors Association have boosted futures prices for soybeans to be in line with the USDA’s projection,” he added. “Corn futures remain slightly below the USDA’s forecast.”

McCormick said, “We would look for the corn market to continue trading in the trade’s sideways range (a market with no bullish or bearish trends) it has been in for the past few months.

“This is anticipating hedging pressure will show up on moves above the $5 price levels, with support from end users buying, if the market would work toward the summer lows at the $4.70 area,” he said.

The report said projected U.S. 2023-2024 corn ending stocks at 2.11 billion bushels, versus the trade estimate of 2.14 billion, and September’s estimate of 2.2 billion bushels. The U.S. wheat ending stocks were at 670 million bushels, above trade expectation for ending stocks to remain at September’s estimate of 615 million bushels.

The report said U.S. soybean ending stocks were at 220 million bushels, versus the trade estimate of 236 million bushels, with September’s estimate also at 220 million bushels.

Soybeans should find continued support on tight, projected U.S. ending stocks until the market is confident in the size of the South American crop,” McCormick said.

“If both the South American corn and soybean crops come in at trend or better, we would look for prices to work lower into the springtime,” he added. “If their crop falters, it should be supportive of world prices.”

For the full October’s WASDE report, visit: www.usda.gov/oce/commodity/wasde/wasde1023.pdf