The price action for U.S. December corn futures has been weak for some time now, likely due to the reality that supply continues to outweigh demand.
As the corn market digests this reality, the bulls hope is that the market has fully priced in this year's crop.
More than half of winter wheat is in poor or very poor condition. Iowa's corn harvest was reported at 67% complete versus 84% past year and 84% on average. The state harvested 946.31 million bushels a year ago. That said, the feeling in Minnesota is that harvest could linger for another couple weeks with producers actively drying corn out of the field. USDA is now projecting corn consumption at 14.4 billion bushels, down 1.4 percent from the record-high consumption observed during the 2016/17 marketing year.
USA corn production is forecast at 14.6 billion bushels, down 4 percent from previous year and a 2 percent increase from the October forecast.
Overall, corn production in the U.S.is expected to be down 4 percent from last year, primarily because farmers planted corn on 4 percent fewer acres this year compared to 2016.
Another record-high yield in the USDA November report pulled corn futures further to new lows, but this only lasted for one session and massive technical buying pushed up the prices again.
The USDA said private exporters sold 135,000 tonnes of USA soymeal to the Philippines for delivery in the 2017/18 marketing year, which began October 1. The stocks-to-use ratio penciled back at 17.2% versus the 5-year average of 13.5%. If these consumption and production numbers are realized, the stocks-to-use ratio would climb to the highest level since 2004/05 at 17 percent.
Nationwide average corn yields are expected to average a record 175.4 bushels per acre, a 3.6 bushel increase from last month's projection and 0.8 bushels better than 2016. Yield increases were particularly strong through the heart of the Corn Belt.
Similar to corn, soybean ending stocks are expected to climb following the record-setting crop.
It is expected that USA wheat inventories will decline further into 2019, but the overall structure of the wheat market won't change without severe drought in the European Union or Black Sea region next year. The CBOT December contract stayed inside of Friday's trading range but held above last week's contract low of $3.40-3/4.
Crop Production report released Thursday shows Iowa corn production is now forecast at 2.54 billion bushels. Comparatively speaking this November the USDA estimated the 2017/18 US corn yield at 175.4 bpa and USA corn ending stocks at 2.487 billion bushels. Friday afternoon December 2017 corn futures closed at $3.43 ½. Similarly, lower consumption volumes could put additional pressure on prices to move even lower.