Nov 10, 2020

Well that was an exciting report today with a few friendly surprises.  They confirmed the China demand we were looking for in corn.  WASDE was previously using 7 MMT of corn to China and now bumped it up to 13 MMT(they have currently have bought around 10 MMT US corn).  There are some people still thinking that is not enough, but it sure helps the carryout shrink.  Corn yield went to 175.8 bpa down from the 178.4 in the October report.  Those changes resulted in a corn carryout of 1.7 billion bushel, which hasn't happened since 2015/2016.  The futures high then was 4.54.  The other big factor today on the corn that wasn't talked about much was they lowered the Ukraine, EU and Russia production estimates, which supports the USDA's raise in exports to record levels.  Bean carryout dropped all the way to 190 million bushels after the USDA lowered yield 1.2 bpa down to 50.7 bpa.  The last time we got close to a 190 million carryout was 2015/2016 in which we put a futures high in at 12.08 futures.  So, at this point 12.00 Jan futures in my next target.  The USDA left Brazil the production estimate unchanged, but lowered Argentina by 1.5 MMT.  South American weather remains a key watch.  There was more corn moving today than beans, but it feels like $4.00 cash corn and 11.00 cash beans are needed before the next big wave of selling shows up.

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