MINNEAPOLIS — There was a 900,000-acre swing in corn and soybean harvested acres in the U.S. Department of Agriculture’s Sept. 10 crop production report as harvest nears.
“The report really contained a lot of surprises across wheat, corn and soybeans as we get into harvest,” Brian Basting, Advance Trading research analyst, said in a Minneapolis Grain Exchange-hosted conference call.
What were the major changes the USDA made on the new crop corn balance sheet?
“USDA increased harvested corn acres from last month by about 600,000 acres. That was a little less than what the trade was expecting based on the Farm Service Agency data that was released earlier this week. (The average trade guess was 85.1 million acres and the report had 85.085 million.) There may be additional changes in October.
“They increased the nationwide corn yield to 176.3 bushels per acre. It was 174.6 in August. (The average trade guess was 175.8.) The combination of the increased acreage and increased yield took the crop to 14.996 billion. That’s about 246 million bushels above where it was in August.
“USDA made some modest increases in usage of about 150 million bushels and 75 million of that was in exports and the other half was in feed and residual category. The result was domestic corn carryout increased from 1.242 billion bushels in August to 1.408 billion bushels in September.”
The USDA lowered the harvested acreage of soybeans in the United States from 86.72 million acres last month to 86.436 million in the September report.
“We’ll see if that’s confirmed in the October and subsequent reports. The yield was increased from 50 bushels per acre to 50.6 and the result was the crop size still did increase by about 35 million bushels from what it was in August.
“Going forward we’ll keep a close eye on these harvest results.”— Brian Basting, research analyst, Advance Trading
“There were very few changes in the usage category. Exports were increased by 35 million bushels from August. However, the carry-in supply was increased from 160 million bushels to 175 million bushels. That was based off of lower crush for the old crop. There was also a reduction in new crop crush of about 25 million bushels.
“The new crop carryout for soybeans increased 30 million bushels from 155 million in August to 185 million in September. The estimate for the just completed crop year is 175 million bushels, so it was just a modest increase of 10 million bushels.”
There were no changes in the wheat production estimates as the trade awaits updated numbers in the USDA’s small grains summary report that will be released Sept. 30. Were there any changes of note on the wheat balance sheet based on demand or imports?
“The USDA made a slight change in soft red winter wheat by increasing the export forecast for 2021-2022 by 5 million bushels, from 115 million bushels in August to 120 million in September. That lowered soft red wheat carryout from 104 million bushels to 99 million bushels this month. I would note that number is still about 16% above last year’s soft red carryout of 85 million bushels. There’s a relatively ample supply, but the world is still concerned about tightened wheat stocks, particularly among competitors.
“We’re looking at some attractive insurance prices here for soft red winter and hard red winter wheat. Those are at nine-year highs for next summer and that would be for the September contract in Chicago for soft red winter wheat and the July contract in most states for hard red winter wheat. That may increase our winter wheat planted acreage this fall.
“We’re also hearing ideas that these higher prices may stimulate more winter wheat acres this fall in places like Russia, Ukraine, as well as Europe and perhaps China, too. The ‘high prices cure high prices’ phrase may be coming into play here as we start this planting season in the Northern Hemisphere.”
What is the trade looking going forward?
“The market is really going to be watching closely now to see what actual harvest results are as we move this harvest forward in the latter half of September and the first half of October. Will that acreage number change at all in subsequent reports in October and November and will we see an adjustment in yield going forward? The market will be watching very closely to see what those results are.”