 Hello, this is Fray Nolson, crop economist and marketing specialist with NDSU Extension. This is the weekly soybean market update for the week of November 5th through November 11th of 2018. This week I'll provide a brief overview of the November WASDE report, which was released on Thursday morning. WASDE stands for the World Agricultural Supply and Demand Estimates. It's a report that's updated on a monthly basis by USDA. This is a supply and demand table for U.S. soybeans, as prepared by USDA. The top half of the table represents the inflow of grain, the different sources of grain for the total supply. The bottom half of the table represents the different categories of usage of the grain. The very bottom line is the ending stocks value, which is the amount of grain that we have in inventory or in storage just before harvest of the following year. So this is the inventory or the amount from one marketing year that gets transferred into the next marketing year. One of the key values that market traders and analysts are looking for from this November report was any adjustments that were being made to the forecast for national average yields for soybeans. The current estimate, the revised estimate is 52.1 bushels per acre. This is about one bushel per acre lower than the October forecast and actually below the lowest trade estimates. The average trade estimate before the report was released was for a value near 52.9 bushels per acre. The lowest estimate from the private analysts was 52.5, the highest was 53.5. So the USDA estimate actually came in below what the traders were expecting to see. To put this in historical perspective, the red line that bounces around through the middle is the historical national average yield for soybeans. The blue line that runs up through the middle, the straight line, is the trend line yield or think of it as the average yield that's been adjusted for technology in better farming practices. So the current yield estimate is approximately 3.9 bushels per acre above trend lines. We are looking at above trend line yields. This is about 10% above average yields. Now we've seen higher yields in the past. For example, 2016, we were nearly five bushels above trend line. But these yield forecasts are still very strong even though they were lower than last month. So if we take the new revised average yield estimate times the harvested acreage, the current forecast for total soybean production is 4.6 billion bushels, which is about 4.3% above last year, and last year was a record number. So the 2018-19 marketing year, we're forecasted to have the sixth record production of soybeans in a row for the United States. Now let's shift from production into looking at consumption or usage. This graph provides some historical context for the three major categories of usage that USDA tracks, crushings, export sales, and seed and residual. So the green line on top represents crushing. This is soybeans that go into the domestic crush industry. It's crushed into soybean oil and soybean meal. The meal is primarily used for livestock feed, as well as some exports. The oil is used primarily for food products, but also biodiesel and some other industrial uses. The red line represents historical export sales. As you can see, export sales have been growing fairly rapidly for the last 15 years. The black line on the bottom is seed and residual. The little dots on the far right-hand edge represent the current USDA forecast for each of these categories. Now let's look at some of the specific numbers. The crushing number or the amount of soybeans going into the domestic crushing industry increased slightly from the October report. There's about a 10 million bushel increase from October into November. This also represents about a 1.2% increase in total crush usage from last year. Again, the soybean meal primarily goes into domestic livestock feed, but approximately 28% of the meal is exported. Again, soybean oil is primarily used for food usage, but about 32% of the soybean oil also goes into the biodiesel sector. So we do have these other market dynamics that can be important to the profitability of the crushing industry. Now the forecast for export sales was really the surprise. Exports are forecasted to decrease about 10, almost 11% from last year, and there was a 160 million bushel reduction from the October forecast. So what USDA does is tries to forecast the total number of bushels that will be sold into the international market for the full 12-month marketing year, and every month we have new information about what the current sales are and what the current market prices are in the world trade, and we can use that then to revise the forecast as we move forward. Unfortunately, our export sales have been a bit slow, so USDA did revise their forecast for total export sales downward by about 160 million bushels from October into November. So current exports of sales forecasts are about 390 million bushels below the June estimate which was made before the Chinese import tariffs were imposed. This graph shows weekly export sales for U.S. soybeans. As you can see, there's a very seasonal pattern in these weekly sales. We've talked about that before. The red line on the bottom is the export sales by week for the 2018-19 marketing year, and as you can see our export sales for U.S. soybeans are well below what we typically see at this time of year. So what USDA is trying to do is take this information and forecast forward and make an estimate of what is of the total sales for the entire 12-month marketing year. The primary reason for the lower total U.S. export sales is the lack of selling into the Chinese market. This graph shows the weekly export sales of U.S. soybeans into China. Again, these are on a weekly basis. You can see the seasonal pattern. The red line on the bottom is the 2018-19 marketing year. As you can see, the export sales have been zero or a very low number for the last several months. So again, the primary reason that our export sales are down is because of the lack of sales into the Chinese market due to the tariffs and the trade problems. So given a slight reduction in total production and a pretty significant reduction in export sales are the forecast for ending stocks, the amount of grain that we're going to have left in the inventory just before harvest of 2019 increased substantially. When we look at the stocks to use ratio, which is a percentage, so we take the ending stocks divided by total use. It represents what percent of our total needs will we have in reserve in case there's a problem. That ending stocks ratio went from about 10% last year to the current forecast of 23.2% in 2018-19. So to put this in historical perspective, the blue bars on the bottom represent the stocks to use ratio going back in time. The red bar on the far right hand side is the current USDA forecast. And again, that can change depending upon changing market conditions. But at 23.2%, that's the highest level percentage-wise in carryover stocks we've seen since the 1985-86 marketing year. So we do have some challenges ahead of us in the soybean markets. The forecast is for some pretty large carryover stocks unless export sales begin to rebound. This concludes this week's recording. Please feel free to contact me if you have any additional questions. Thank you very much.