Setzer: USDA’s October Report Brought ‘Surprise’ that Boosted US Soybean Prices

The USDA’s latest reports brought a boost to soybean futures on Thursday as the 2023 soybean production estimates were lowered slightly while ending stocks remained the same.

“In the soy complex, the data that we received wasn’t necessarily bullish—it simply wasn’t bearish, and that’s what trade was expecting,” says Karl Setzer with Consus Ag Consulting.

Soybean ending stocks were unchanged at 220 million bushels, while the trade had been expecting an increase to 236 million bushels.

“Funds have been heavily liquidating soybeans. They actually got out of their longs were just edging into short territory. Then they got what I would call a ‘neutral surprise’ in the market. That got everything to turn higher and brought in some buyers. Then, we look over at the global side and the global soybean ending stocks came in 4 million metric tons less than trade was expecting and brought even more buyers to the market,” according to Setzer.

Soybean production is forecast at 4.1 billion bushels, down 42 million on lower yields. The yield is predicted at 49.6 bushels per acre, down 0.5 bushels from last month.

At the close of trade on Thursday, Oct. 12, November soybeans ended $0.37 ½ higher at $12.90 a bushel.

“Corn and wheat both received positive reports, but not enough to encourage the sharp buying we did in the soy complex,” says Setzer.

Corn ending stocks are estimated at 2.11 billion bushels. The USDA also says U.S. corn production is forecast at 15.1 billion bushels, down 70 million on a cut in yield to 173.8 bushels per acre.

The corn outlook predicts reduced supplies, down less than one percent, but ten percent above 2022.

Wheat supplies were raised by 85 million bushels this month, primarily on higher production as reported in the NASS Small Grains Summary. Wheat ending stocks were up from last month at 670 million bushels—an increase of 55 million bushels, which was 23 million bushels more than previous trade estimates.

Click below to hear Karl Setzer with Consus Ag Consulting and his analysis of the USDA’s latest report data on Thursday, Oct. 12 and its impact on the grain markets.