1/12/2021

There's always a chance a USDA report could contain a surprise and the WASDE report released today didn't disappoint. We had an 8am sale announcement of 120,000 tonnes of soybeans to unknown. Comparatively speaking, trade was mostly subdued with corn trading unchanged to 3 higher and beans 5 to 15 cents higher prior to the report release but that all changed once the clock read 11 a.m. Today's report was friendly for corn as we saw a carryout posted of a 1.552 billion bushel carryout vs 1.599 expected. The biggest surprise of the report was the average corn yield of 172 bu/ac with an expected number of 175.3. I've mentioned my concern of a cut in ethanol use and exports as a result of sharply higher corn prices and today's report did reduce the expected corn use for ethanol and exports by roughly 200 million bu. If prices continue to trend higher, larger reductions in both of these should be expected. The soybean yield, production, and ending stock numbers were right on target with trade expectations giving the bulls the green light to continue their run. Today's report answered a lot of our questions today and it is comforting that we finally have some validation to our month-long corn rally.