Only subtle changes were made to the corn balance sheets in the November supply and demand report.

Corn yield is now estimated at 122.3 bushels per acre and crop size at 10.725 billion bushels, both slightly larger than in October.

Carryout is now estimated at 647 million bushels, a 28 million bu increase from last month. The only significant change in corn demand was a 17 mb increase in industrial use.

Soybean numbers had more changes, and had a negative impact on the complex.

Soybean yield increased a record 1.5 bushels per acre from October to a 39.3 bushel per acre U.S. average.

This increase in yield raised the crop size to 2.97 bb, and elevated carryout 10 mb to 140 mb.

The USDA did increase soybean usage by 20 million on crush and 80 million on exports.

The numbers in the updated balance sheets that surprised trade the most came from the wheat complex.

The USDA cut U.S. wheat export forecasts by a large 50 mb.

This raised the projected carryover on wheat to 704 mb, which is still 40 mb under last year’s ending stocks.

A lower global wheat crop is expected though due to weather losses in the Black Sea region and Australia.

There are conflicting opinions on how much corn the United States may import this marketing year.

The USDA is projecting corn imports of 75 mb this year, but some analysts have it as high as 125 mb. These may both be inaccurate though, as some of the corn the United States recently booked for import has been resold to other buyers, mainly in Europe.

Drought has reduced European crop sizes and increased imports will be needed to satisfy demand there.

Corn futures are starting to show strength from speculation we will see increased export demand in the near future.

This is coming from thoughts other corn suppliers to the world market are running out of exportable inventory.

While this may be true, the question is if elevated corn exports would cut corn ending stocks, or merely off set reduced domestic demand.

The timeline for return of profitability to the U.S. ethanol industry is unclear.

Spokespeople for the industry claim the quickest way to increase profits would be to promote exports and raise blend rates.

There has long been talk of increasing the U.S. ethanol blend rate to 15 percent, but so far, only 8 stations in the entire United States offer ethanol at this blend.

It may also be hard to increase exports on ethanol given a rebound in South American production, which is historically cheaper than fuel from the U.S.

Much of the talk on soybean demand this marketing year has focused on exports, but domestic demand is elevated as well.

We have seen strong crush margins on soybeans all year, and buyers have pushed for inventory to capture this.

Soybean crush may not slip anytime soon either, as soymeal is becoming a more economical protein source than distiller’s dried grains.

We are also seeing dwindling inventories of distiller grains as U.S. ethanol production slows.

Even though Brazil has long been a competitor of the United States in the global commodity market, this rivalry could soon increase.

Brazilian officials have stated that within the next 12 months China will likely approve the imports of Brazil’s GMO soybeans.

This news comes on the heels of the European Union opening up for Brazilian corn imports.

This means the United States will need to become more price competitive in the world market.

Karl Setzer is a commodity trading advisor and market analyst at MaxYield Cooperative. He can contacted at:

ksetzer@maxyieldcooperative.com.