With harvest nearly finished across the U.S., the grain trade anticipates the next USDA report. (Photo courtesy National Corn Growers Association)

By Carrie Muehling

BLOOMINGTON – The grain markets were in a choppy pattern to start the week as traders anticipate a major government report due out Nov. 9. 

This is the last time the USDA will estimate the U.S. corn and soybean production for this calendar year.

“Most are expecting an increase for the soybean estimate,” said Brian Basting, commodity research analyst with Advance Trading.  “Corn is another story.  Of course, as we all know, it’s been a rough year for corn.  But we are anticipating a larger soybean estimate on Friday and differing estimates on corn – maybe a modest increase on corn.  But that will be the big news this week, Friday’s report.”

For soybeans, it could be interesting to see how much of the increase in production is absorbed by increased usage as export sales for soybeans continue to be strong.  Usage and ending stocks numbers will be important.  Corn is going the other direction as there are currently record exports of corn coming out of Brazil, in direct substitution for U.S. corn exports.

“We’re looking at one of the weakest corn export trends in decades.  Definitely going in opposite directions, so we’ll see on Friday how much of an increase we may see in soybean exports and how much of a decrease we may see in corn, and take a look at that carryout estimate for some guidance,” said Basting.

The strength in soybeans is typical during this time of the year, as this is when South American competition in soybeans subsides.  Tremendous demand continues from China and that should continue into 2013.

The weather market continues as the South American growing season is off to a less than ideal start.  Too much rain in parts of Argentina has delayed corn planting there.  More favorable conditions are in the forecast there for the end of this week and early next week.  In parts of Brazil, it has been dry. 

Other factors to watch include the election, the European situation and Chinese demand and development.  The corn and soybean harvest there is wrapping up and might not be as good as the USDA has indicated.  Lots of moving parts and historically tight stocks for both corn and soybeans will mean continued volatility in the markets.

Carrie Muehling can be reached at carrie@wjbc.com.