1. Corn Surges Overnight After USDA Cuts Stocks Estimate

Corn surged to the highest price in more than seven years in overnight trading, continuing its hot streak that kicked off with the bullish U.S. Department of Agriculture report that pushed futures limit up on Tuesday.

The USDA said in its monthly World Agricultural Supply and Demand Estimates (WASDE) report that it expects corn inventories at 1.552 billion bushels at the end of the 2020-2021 marketing year on Aug. 31.

That’s down from the prior month’s outlook for 1.702 billion bushels, and below expectations from analysts for 1.7 billion bushels.

Soybean stockpiles at the end of August were pegged at 140 million bushels, down from the previous month’s outlook for 175 million bushels, but just ahead of forecasts for 139 million bushels.

Wheat stocks at the end of the grain’s marketing year on May 31 are seen at 836 million bushels, down from the December outlook for 862 million bushels, the USDA said.

Analyst had expected wheat inventories at 859 million bushels. 

Corn futures for March delivery jumped 17 3/4¢ to $5.35 a bushel overnight on the Chicago Board of Trade.

Soybean futures for January delivery rose 3 1/4¢ to $14.21 ½ a bushel overnight. Soymeal fell $1.20 to $464.20 a short ton, and soy oil gained 0.3¢ to 42.93¢ a pound.

Wheat futures for March delivery were up 5¢ to $6.70 a bushel, while Kansas City futures added 6¢ to $6.28 ½ a bushel.

2. Crop Production, Quarterly Stocks Reports Add to Bullish Sentiment

It wasn’t just ending stocks that made Tuesday’s USDA reports so bullish.

The government cut its outlook for corn production to 14.182 billion bushels from 14.507 billion bushels as its yield forecast dropped to 172 bushels an acre from 175.8 bushels.

Harvested area was unchanged at 82.5 million acres.

Soybean output also was lowered to 4.135 billion bushels from 4.17 billion a month earlier. The USDA’s yield projection declined to 50.2 bushels an acre from 50.7 bushels a month earlier. The area expected to be harvested was unchanged at 82.3 bushels an acre.

Wheat output in the grain’s marketing year that ends on May 31 was unchanged at 1.826 billion bushels, though ending stocks were raised slightly to 836 million bushels from 862 million in December.

The USDA also released its quarterly grain stocks report that showed how much was in storage at the start of December.

Corn inventories on Dec. 1 totaled 11.3 billion bushels, down slightly year-over-year. Analysts had expected stockpiles of 11.951 billion bushels.

Soybean stockpiles totaled 2.93 billion bushels, a 10% drop from the same date a year earlier, the USDA said. Analysts had forecast soybean inventories at 2.92 billion bushels.

Wheat stocks at the beginning of last month totaled 1.67 billion bushels. That’s below forecasts for 1.695 billion bushels.

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3. Strong Winds With Gusts Up to 70 Miles an Hour Expected Wednesday

Strong winds are expected in a large chunk of land stretching from northern Montana south into southern Kansas and east into the western edge of Minnesota, according to the National Weather Service.

In portions of North Dakota and South Dakota, northwest winds are expected to be sustained from 40 to 50 miles an hour with gusts of up to 70 miles an hour, the NWS said in a report early this morning.

“The high winds may blow down large trees and damage roofs, small outbuildings and signs,” the agency said. “Power outages are possible. Travel could be difficult, especially for high-profile vehicles. Strong winds can cause blowing dust, reduced visibility and flying debris.”

The wind in areas of Nebraska are pegged from 30 to 45 miles an hour with gusts of up to 60 miles an hour.

Damage to trees and power lines are likely. The strong winds are expected to last into tomorrow evening before rebuilding overnight into Friday, the NWS said.