USDA crop report ‘plain ham sandwich’

CHARLOTTE, Mich. — Despite the latest — and delayed — crop balance sheets showing only slight changes, the U.S. Department of Agriculture’s reports painted the trade screens red on Nov. 14.

USDA’s crop production and world agricultural supply and demand estimates reports marked the first time in two months that data was available. Last month’s reports were canceled due to the government shutdown.

“It is a November (World Agricultural Supply and Demand Estimates) report, but it is a little bit more stressful simply because we missed the October WASDE. They did collect the data throughout the month of October,” Angie Setzer, Consus Ag Consulting copartner with Karl Setzer, said minutes before the reports were released.

“There was some concern that we wouldn’t have the objective yield data, but they did. There is objective yield data that has been collected. It was not being analyzed throughout the month of October. I’m not sure of when they started analyzing the data again, or anything like that, but they did collect that.

“It is farmers survey-driven, as well. So, we will have an updated farmers survey.”

The Setzers reviewed the key data from USDA’s crop balance sheet report on their live podcast on X.

What were the changes of note in the corn numbers?

Angie: USDA basically left everything almost as is. They reduced corn yields from 186.7 to 186. The average trade guess was 184.

Obviously, production came in slightly higher than what folks were anticipating, a couple hundred million bushels, but they then left demand a bit more elevated than what a lot of folks would have thought.

If you would asked anyone, they would have said they were going to lower that feed and residual usage aggressively and also probably lower ethanol. They did neither. They left feed and residual at 6.1 billion bushels.

They went ahead and made adjustments on the old crop side things to adjust the beginning stocks higher. They left ethanol at 5.6 billion bushels. They bumped up exports 100 million bushels.

So, we’re at 2.154 billion bushels carryout, slightly higher than was traders were expecting at 2.136 billion and 44 million higher than the last report.

USDA did trim the U.S. soybean yield average of 53.5 bushels per acre in September to now 53 bushels, matching the pre-report trade estimates, right?

Angie: Soybean carryout came in slightly lower than what traders were expecting at 290 million versus 304 million. But, really, we didn’t see much of anything changed.

Harvested acres are at 80.3 million and production, at 4.253 billion bushels, is slightly lower than the last report.

Crush was left unchanged. Exports were reduced by 50 million to offset the loss in production and beginning stocks were slightly smaller.

Did USDA’s world crop balance sheets follow the same trend as the domestic reports in terms of minimal changes?

Karl: World corn came out a little bit lighter than I expected. It came out 281.34 million metric tons. The trade was expecting 282.80. We were expecting 284 million, so not too far off from what we had in September.

The world wheat carryout coming in 271.43 million tons, well above expectations of 266.10 million. It was 264.06 in September. So they took that one up quite a bit there.

The world soybean carryout came in at 121.99 million tons. Traders were expecting 124.21 million.

Any other thoughts regarding these reports?

Karl: Not many changes in the world numbers. It almost feels like the USDA just kind of punted a little bit.

Angie: There was a lot of talk about that ahead of the numbers. I didn’t think they would, honestly, but I think it probably makes the most sense that they wait until we get stocks figures in and are back up and running for six weeks.

Karl: Looking at these numbers, if these were the ones that came out in October, you wouldn’t think anything of it. We’ve had 60 days to wait for them now, and I think the anticipation was you’d have a little bit more changes in what we got.

Angie: Corn is down 8 cents, soybeans are down 17 cents and wheat is down 11 cents just after the reports’ releases.

When you build up coming into a report like this, to me, it didn’t feel like we were trading trade expectations. It felt like we were trading an 180 or below corn yield and a 51 or 52 soybean yield when it came down to it.

I feel like we were expecting a bullish surprise and we just got a plain ham sandwich, I guess, is what I would call this report.

Overall, I would say if you were expecting a bullish report, you did not get one. If you were expecting them to phone it in and they are waiting to see what January brings, you got that.