USDA lowers 2018 wheat, soybean carryover from October

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The USDA said corn export sales jumped last week to a 5-1/2-year high of more than 2.9 million tonnes, including 2.3 million for shipment in the current marketing year, topping trade estimates.

Based on November 1 conditions, average corn yield in 2017 was forecast at a record 175.4 bushels an acre, up 3.6 bushels from October and up 0.8 bushels from 174.6 bushels an acre in 2016, the previous record. The increase resulted from a 298-million-bu increase in forecast 2017 corn production, at 14,578 million bus, partially offset by a 75-million-bu increase in 2017-18 feed and residual use at 5,575 million bus, and a 75-million-bu increase in forecast exports at 1,925 million bus.

"The corn numbers are the biggest bearish surprise in the data", according to Farm Futures senior grain market analyst Bryce Knorr. "And usage for ethanol looks stronger than USDA forecasts, which could also whittle away at supplies". Harvested area remained unchanged from October estimates, remaining at a record 89.5 million acres.

Yields are expected to average 197 bushels per acre, up 6 bushels per acre from the October forecast.

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Soybean production was forecast at a record 4,425 million bushels, down just 6 million bushels from 4,431 million bushels in October but up 129 million bushels, or 3 percent, from 4,296 million bushels previous year.

Corn and soybean futures rebounded on Friday as traders absorbed a government report projecting larger-than-expected harvests. NOTE: All figures listed in billions of bushels. "Some bulls were betting on a more substantial cut, and that's what triggering selling today".

The world is nevertheless still well supplied with wheat.

Still, the January soybean contracts are above the 200-day, 100-day and 50-day moving averages, which will provide support to the market. "That's actually in line with what my models have been showing, though I didn't expect the agency to make a change yet".

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