USDA estimates friendly, but not bullish

Wet conditions limited harvest opportunities when this photo was snapped early last week near the border of Livingston and Grundy counties in Illinois.

The U.S. Department of Agriculture’s monthly crop balance sheets and production estimates released Nov. 8 were met with a slightly friendly market reaction for corn and wheat and a somewhat negative reaction on the soybean side.

Randy Martinson, Martinson Ag Risk Management, gave a rundown on the latest estimates compared to what the trade had anticipated entering the report in a Minneapolis Grain Exchange-hosted teleconference.

Pre-report trade estimates projected a corn production reduction. How did USDA’s number compare to what the trade was looking for?

The corn numbers were a little bit friendly. The yield for 2019 was dropped 1.4 bushels per acre from the previous month to 167. That was about one-tenth of a bushel higher than trade expectations.

Corn production was put at 13.66 billion bushels. That’s 118 million bushels lower than the previous month, but it was still 86 million bushels above what the trade had anticipated.

Corn harvested acres were unchanged at 81.8 million acres, that’s 500,000 acres higher than anticipated by the trade.

What were among the highlights on the corn demand side?

Feed demand was cut by 25 million bushels, ethanol was cut by 25 million bushels and as expected exports were cut by 50 million bushels putting ending stocks at 1.91 billion bushels. That was 19 million bushels below last month but 154 million bushels above the average trade guess going into the report.

The USDA left the nation’s soybean planted and harvested acres unchanged as well as the yield average unchanged at 46.9 bushels per acre.

The 75.6 million harvested acres was 200,000 acres above trade expectations, and 46.9 bushels per acre was about four-tenths of a bushel above expectations. That left production unchanged at 3.55 billion bushels, about 50 million bushels above what the trade anticipated.

The only change that we did see on the demand side for soybeans was crush was decreased by 15 million bushels that followed through to increase ending stocks by 15 million to 475 million bushels, about 56 million bushels above expectations.

Due to late season precipitation and mid-October snow, USDA lowered wheat harvested acres from 6.6 million acres to 5.95 million acres in North Dakota and from 2.86 million to 2.76 million acres in Montana. What impact did those moves have on the overall wheat balance sheet?

In the Sept. 30 small grains summary we were looking at 12.435 million acres of spring wheat harvested and USDA dropped it to 11.66 million acres and that put production down from close to 600 million bushels to 562.38 million bushels.

For all wheat, there were no changes in the 2017 or 2018 numbers. We did see the 2019 harvested acres drop by 900,000 acres putting it at 37.2 million acres.

The all wheat yield was increased by one-tenth of a bushel to 51.7 bushels per acre. Production overall was cut by 42 million bushels putting it at 1.92 billion bushels.

On the all wheat demand side, usage was dropped by 12 million bushels, food was cut by 5 million bushels, seed was cut by 7 million, but there was a decrease in stocks down to 1.014 billion bushels, 29 million bushels lower than the previous month and 11 million bushels lower than anticipated by the trade.

But it wasn’t enough to help support the wheat prices as the national average wheat price dropped 10 cents to $4.60 cents per bushel.

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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