WASHINGTON — The surprises in the U.S. Department of Agriculture’s Aug. 12 crop production report were plugged into the agency’s supply and demand estimates and moved ending stocks in different directions.

Here are the USDA’s numbers:

CORN: THE PROJECTED SEASON-AVERAGE PRICE RECEIVED BY PRODUCERS WAS LOWERED 10 CENTS TO $3.60 PER BUSHEL.

Why?

  • Corn production is forecast at 13.9 billion bushels, up 26 million from the July projection as a decline in harvested acres is virtually offset by an increase in yield.
  • The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 3.5 bushels higher than last month’s projection.
  • The crop production report indicates that Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio, and South Dakota are forecast to have yields below a year ago. Of the major producing states, only Missouri is forecast to have yields above a year ago.
  • Corn used for ethanol was reduced by 25 million bushels to 5.5 billion bushels.
  • Exports are lowered reflecting U.S. export competitiveness and expectations of increasing competition from Argentina, Brazil, and Ukraine. With supply rising and use falling, ending stocks are up 171 million bushels to 2.2 billion.
  • Foreign corn ending stocks are higher relative to last month, mostly reflecting increases for China, EU, Ukraine, and Turkey partially offset by reductions for Argentina and Indonesia.

SOYBEANS: USDA LEFT THE NATIONWIDE SEASON-AVERAGE PROJECTED PRICE UNCHANGED AT $8.40 PER BUSHEL.

Why?

  • U.S. oilseed production for 2019-2020 is projected at 111.5 million tons, down 4.5 million from last month mainly due to a lower soybean production forecast.
  • Soybean production is forecast at 3.68 billion bushels, down 165 million on lower harvested area.
  • Harvested area is forecast at 75.9 million acres, down 3.4 million from the June acreage report led by reductions for Ohio and South Dakota. These states account for almost half of the national reduction.
  • The first survey-based soybean yield forecast of 48.5 bushels per acre is unchanged from last month but 3.1 bushels below last year’s level.
  • With lower production partly offset by higher beginning stocks, soybean supplies for 2019-2020 are projected at 4.77 billion bushels, down 3% from last month.
  • U.S. soybean exports are reduced 100 million bushels to 1.78 billion reflecting reduced global import demand, mainly for China. Soybean ending stocks are projected at 755 million bushels, down 40 million.
  • Changes for 2018-2019 include reduced soybean crush, reflecting lower domestic use and exports of soybean meal. Old crop soybean ending stocks are projected at 1.07 billion bushels, up 20 million from last month.
  • China’s soybean imports are lowered 2 million tons to 85 million reflecting lower soybean meal crush in 2019-2020. With crush also lowered in 2018-2019, China’s protein meal consumption growth is forecasted flat in 2019-2020.
  • Global 2019-2020 soybean ending stocks are lower relative to last month due to lower stocks in the U.S. and China.

WHEAT: USDA FORECASTS A 20-CENT PER BUSHEL DROP IN THE SEASON-AVERAGE FARM PRICE TO $5 PER BUSHEL.

Why?

  • U.S. wheat production is raised 59 million bushels to 1.980 billion on increased winter wheat and other spring wheat production as indicated by the August crop production report.
  • Estimated food use for the 2018-2019 market year was lowered 5 million bushels to 955 million based on the latest flour milling products report. Food use for the 2019-2020 market year was also lowered 5 million bushels to 960 million.
  • Feed and residual use is raised 20 million bushels to 170 million on greater wheat supplies and more competitive prices.
  • Projected 2019-2020 U.S. wheat exports were raised 25 million bushels to 975 million on lower exportable supplies from key competitors, notably the European Union, Kazakhstan, and Russia.
  • Ending stocks for 2019-2020 are raised 14 million bushels to 1.014 billion, down 5% from the previous year.
  • Projected 2019-2020 world consumption is 2 million tons lower on both reduced feed and residual use and food and industrial consumption.
  • With supplies falling more than use, global ending stocks are revised 1.1 million tons lower to 285.4 million tons, but remain record large.

Tom C. Doran can be reached at 815-780-7894 or tdoran@agrinews-pubs.com. Follow him on Twitter at: @AgNews_Doran.

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