Bearish USDA Report... But Corn Rallies?! Here's Why

Joe's Premium Subscription: www.standardgrain.comGrain Markets and Other Stuff Links-Apple PodcastsSpotifyTikTokYouTubeFutures and options trading involves risk of loss and is not suitable for everyone.0:00 USDA and Corn Rally6:10 The Funds8:26 US/China Talks to Resume9:39 USDA Reporting Problems11:12 Rare Soybean Oil Sale🌽 USDA Shakes Up Corn & SoybeansUS corn acreage is projected to be the largest since 1936. On Friday, USDA raised its estimate by 1.5% to 98.7 million acres. Despite a lower average yield projection of 186.7 bpa, the agency still forecasts a record 16.8 billion bushel corn crop. Ending stocks were trimmed slightly to 2.1 billion bushels but remain the highest since 2018/19.For soybeans, yield was lowered to 53.5 bpa, but acreage revisions lifted production to 4.3 billion bushels. Exports were cut due to the ongoing US–China trade war, pushing ending stocks higher. If confirmed, USDA’s corn crop estimate would beat the previous record (2023) by a massive 9.6%. 📉 Funds Add to ShortsCFTC’s weekly Commitment of Traders report showed money managers were net sellers:Corn: -4k contractsSoybeans: -25k contracts (largest net short since mid-August)SRW Wheat: -10k contracts🤝 US–China Trade TalksTreasury Secretary Scott Bessent meets with Vice Premier He Lifeng this week in Madrid. The talks aim to lay the groundwork for a deal: China purchases in exchange for tariff relief. This comes as the 90-day tariff truce nears expiration in early November. So far, China hasn’t bought a single bushel of US soybeans for the current marketing year.🇨🇳 Export Sales TwistLast week’s reported “sale” of 2 million bushels of soybeans to China actually dated back to January, highlighting USDA reporting issues amid budget cuts and staffing problems. For comparison, China bought 26.8 mmt ($12.6B) of US beans last season.🛢 Soybean Oil SurpriseUSDA reported a flash sale of 22,000 mt soybean oil to South Korea for 25/26 delivery—the first of the year. Flash sales of oil are rare given domestic biofuel demand.