The USDA sees the U.S. corn and soybean crops getting smaller, while ending stocks fall too.
As a result, the CME Group’s farm markets mostly jumped, Friday, following the release of the USDA’s release of its September Supply/Demand and WASDE Reports.
At the close, the Dec. corn futures finished 3 1/2¢ higher at $3.68 1/4. March corn futures closed 3 1/4¢ higher at $3.78 1/4.
Nov. soybean futures ended 18 1/2¢ higher at $9.96. January soybean futures closed 17 3/4¢ higher at $9.99 1/4.
Dec. wheat futures finished 6 1/4¢ lower at $5.42.
Dec. soymeal futures settled $7.10 per short ton higher at $324.60. Dec. soy oil futures closed $0.51 cent higher at 33.71¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.11 per barrel higher at $37.41. The U.S. dollar is lower, and the Dow Jones Industrials are 35 points higher.
2020/2021 U.S. Production
The USDA pegged the average U.S. corn yield at 178.5 bushels per acre vs. the trade’s expectation of 178 bushels per acre and the USDA’s August estimate of 181.8 bu./acre.
The U.S. total corn production is seen at 14.9 billion bushels vs. the trade’s expectation of 14.8 billion and the USDA’s August estimate of 15.27 billion bushels.
If realized, it would be the second-largest U.S. crop ever produced. Also, the USDA/NASS agency made a note in the report that due to the resurvery of Iowa’s derecho storm-affected crops, it dropped the state’s corn acreage estimate by 550,000 and left soybean acreage unchanged.
For soybeans, the U.S. average yield is seen at 51.9 bu./acre vs. the trade’s expectation of 51.8 and the USDA’s August estimate of 53.3 bu./acre.
For 2020/2021 production, the USDA pegged the soybean crop at 4.31 billion bushels vs. the trade’s expectation of 4.2 billion bushels and the August estimate of 4.42 billion.
U.S. 2019/2020 Ending Stocks
On Friday, the USDA pegged the old crop U.S. corn ending stocks at 2.25 billion bushels vs. the trade’s expectations of 2.23 billion and the and the government’s August estimate of 2.28 billion.
For soybeans, the old crop ending stocks were estimated at 575 million bushels vs. the avg. trade estimate of 600 million bushels and the USDA’s August estimate of 615 million.
U.S. 2020/2021 Ending Stocks
On Friday, the USDA pegged the new crop U.S. corn ending stocks at 2.50 billion bushels vs. the trade’s expectations of 2.45 billion and the government’s August estimate of 2.75 billion.
For soybeans, the new crop ending stocks were estimated at 460 million bushels vs. the avg. trade estimate of 465 million bushels and the USDA’s August estimate of 610 million.
The USDA’s wheat new crop ending stocks estimate totaled 925 million bushels vs. the trade’s estimate of 924 million bushels and the USDA’s August estimate of 925 million.
World Ending Stocks 2019/2020
On Friday, the USDA pegged the old crop World corn ending stocks at 309 million metric tons vs. the trade’s expectations of 310.9 mmt and the government’s August estimate of 311.3 mmt.
For soybeans, the old crop ending stocks were estimated at 96.0 mmt. vs. the avg. trade estimate of 95.7 mmt. and the USDA’s August estimate of 95.8 mmt.
For wheat, the USDA pegged old crop ending stocks at 299 mmt. vs. the trade’s expectation of 330.4 met. and the USDA’s August estimate of 300.9 mmt.
World Ending Stocks 2020/2021
On Friday, the USDA pegged the new crop World corn ending stocks at 306.8 million metric tons vs. the trade’s expectations of 311.1 mmt and the government’s August estimate of 317.4 mmt.
For soybeans, the new crop ending stocks were estimated at 93.6 mmt. vs. the avg. trade estimate of 93.1 mmt. and the USDA’s August estimate of 95.3 mmt.
For wheat, the USDA pegged new crop ending stocks at 319.4 mmt. vs. the trade’s expectation of 315.4 met. and the USDA’s August estimate of 316.7 mmt.
Jack Scoville, PRICE Futures Group, says that today’s reports were neutral to maybe a bit bearish, but you would not think so looking at the trade reaction.
“The soybeans are really flying. Not sure if it is China demand related, or, if the trade expects less beans than what USDA shows in this report in the coming production estimates, but beans are on the way to $10.00 and higher. Corn is struggling to follow, but can’t break due to the beans. The production and ending stocks estimates could be considered a little negative in corn. Wheat prices are just kind of mixed after a neutral report,” Scoville says.
Peter J. Meyer, S&P Global Platts, head of grain and oilseed analytics, says that all in all, today’s USDA numbers have very little in the way of surprises as pre-report estimates and the WASDE were fairly close.
“Based on the market reaction in corn it would appear that all the changes in the WASDE this month had already been priced in. Soybeans were a bit of a better market story, although the carry out was expected,” Meyer says.
Jason Roose, U.S. Commodities, says that the well anticipated September crop report was neutral by number with most of the numbers reported within trade estimates.
“Ending stocks on U.S. corn was reduced, and yields were reduced by 3 bushels from the August report and soybeans were reduced by 1.4 bushels. The strong demand and adverse weather in the Midwest and parts of the world have given the corn and beans strength in the past 30 days. Also, strong export demand will need to continue to keep a premium in the soybean market with harvest fast approaching,” Roose says.
Sal Gilbertie, Teucrium Trading, says that today’s report pretty much met expectations with the notable exception of no revisions in Chinese imports of either corn or soybeans.
“However, increased exports were the main catalyst for the tightening of the soybean balance sheet, which seems to be providing some support for soybeans this afternoon. Globally we will use more corn than we produce, which will likely put the corn bears on the defensive moving forward,” Gilbertie says.