The long awaited, post-shutdown USDA crop report was released on Nov. 8. And while the report did not contain any big surprises, the market behaved as though it did. Soybeans (CBOT:SF14) and soybean meal both rallied sharply back to the highs of their recent ranges (Chart 1).
It was well known that the weather improved in the final stages of the 2013-14 U.S. growing season, providing a boost to the crop that was planted late and had its share of weather problems earlier in the season. In the last crop report before the shutdown on Sep. 12, the USDA estimated the soybean yield at 41.2 bushels per acre. The average guesstimate was for an increase to 42.407 bpa, but the estimate came in at 43 bpa.
The number of harvested acres were expected to fall, but they were even lower than expected, which mitigated the bearish tone set by improved bpa yields to some degree. The average guesstimate was 75.93 million acres, but the figure came in at 75.7 million acres, down from the 76.4-million-acre September estimate.
The end result was still a better-than-anticipated crop estimate of 3.258 billion bushels (88.66 million tonnes), up from the September estimate of 3.149 billion bushels (85.71 million tonnes) and above the average of analysts’ estimates of 3.222 billion bushels (87.69 million tonnes).