09/13/2023 Overnight Markets Hint Post-WASDE Sell-off Was Overdone

On the Grains:
Selling subsided overnight after yesterday’s unexpectedly bearish reaction to WASDE numbers. Corn and beans are steady to firm and wheat is up again as this goes to press. Corn and soybean yields were lowered pretty much to the average trade estimate, but the drop in corn yield was more than offset by the 800,000 acre boost to planted acreage that actually boosted ending stocks slightly and left their average farm price unchanged at 4.90. What hurt more was the boost to global corn ending stocks. The trade was expecting them to decline about 1.4 million tonnes and instead were boosted by nearly 3 million to 314 million, which exceeded even the highest of pre-report trade guesses.
 
The break in soybeans yesterday was even harder to figure. USDA dropped the average yield to the average trade estimate so no surprise there. They raised acreage by 100,000 acres and cut both domestic crush and exports some, but still the net result was a 40 million bu. drop in ending stocks just 7 million bu. shy of the average trade estimate for a 47-million bu. reduction. They raised the average farm price forecast from last month by 20 cents per bu. – to $12.90. And unlike the negative surprise by raising global corn stocks, they still cut the global ending stocks for soybeans, just not as much as the trade was expecting by a fraction of a percentage point.