USDA surprised the market Monday by increasing corn production to 13.9 billion bushels and raising the average national yield by more than 3 bushels to 169.5 bushels an acre.
Farmers planted 76.7 million acres to soybeans, according to USDA’s revised planting survey. With a national average yield of 48.5 bpa, total production is forecast at 3.68 billion bushels. The production estimate is a 19% drop from last year, and while within the range of pre-report estimates, the production figure was toward the low end.
USDA on Monday released its August Crop Production and World Agricultural Supply and Demand (WASDE) reports.
Monday’s new U.S. ending stocks estimates were bearish for corn and neutral for soybeans and wheat, said DTN Lead Analyst Todd Hultman. The 2019-20 world ending stocks estimates from USDA were bearish for corn, bullish for soybeans and neutral for wheat, he said.
Corn production was bumped up 26 million bushels (mb) for the 2019-20 crop to 13.9 billion bushels (bb). This was way off the range in the pre-report estimates by analysts. The pre-report average for corn production was 13.164 billion bushels, though the spread among analysts was wide.
Area planting acres were projected at 90 million acres, down 1.7 million acres from USDA’s earlier planted acres reports.
USDA increased corn yield by 3.5 bushels per acre (bpa) to 169.5 bushels an acre. The 2018-19 average corn yield was 176.4 bpa.
USDA increased carryover from the 2018-19 crop by 20 million bushels to 2.36 billion bushels of beginning stocks for the 2019-20 crop.
For demand on the 2019-20 crop, USDA lowered corn used for ethanol by 25 million bushels, lowering domestic demand by the same volume to 12.08 billion bushels. USDA also dropped export demand by 100 million bushels to 2.05 billion bushels.
The 2019-20 ending stocks for corn were raised by 171 million bushels from the July estimate to 2.181 billion bushels.
The average farm price for corn is now projected at $3.60 a bushel, a 10-cent decline from the July estimate.
In world numbers, USDA maintained Brazil’s 2018-19 corn production at 101 million metric tons (mmt), (3.97 billion bushels), the same as in July. Argentina’s production was also the same as last month at 51 mmt (just over 2 billion bushels).
Also globally, USDA lowered world beginning corn stocks for the 2019-20 slightly to 328.58 million metric tons. Production was raised 3 million metric tons. Global ending stocks (without China production) for the 2019-20 crop were raised 8.8 mmt to 307.72 mmt.
Total U.S. wheat production for 2019-20 was pegged at 1.980 bb, up 5% from last year. That’s a significant increase from USDA’s July estimate of 1.921 bb, and came in at the high end of pre-report analyst estimates. USDA expects all wheat to yield an average of 51.6 bpa, up 4 bushels from last year and up 1.6 bushels from the July report.
Of that, USDA estimated that winter wheat production will account for 1.33 bb, up 12% from last year. As of Aug. 1, average winter wheat yield was estimated at 53.2 bpa, up 5.3 bushels from last year. Hard red winter wheat is pegged at 840 mb, above pre-report expectations. Soft red winter wheat production is expected to reach 257 mb, and white winter wheat is estimated to hit 229 mb — both numbers were within the range of pre-report analyst estimates.
Durum wheat production was projected to reach 57.3 mb, down 26% from 77 mb last year. Durum wheat crop’s average yield is expected to reach 42.3 bpa, up 3 bpa from last year. Other spring wheat production is pegged at 597 mb, down 4% from 2018.
Against analyst expectations, USDA adjusted domestic new-crop wheat ending stocks upward, from 1.000 bb in July to 1.014 bb. This change was driven by increased winter wheat and spring production estimates from USDA NASS’ August Crop Production report.
Old-crop (2018-19) domestic wheat ending stocks were pegged at 1.072 bb. The average farm-gate price for wheat was $5.00 per bushel, down 20 cents from the July price.
Globally, USDA’s estimate for new-crop ending stocks for wheat came in slightly lower, at 285.40, down from 286.5 mmt in July. Old-crop global wheat ending stocks were pegged at 275.49 mmt, slightly up from July’s estimate of 275.1 mmt.
Farmers planted 76.7 million acres to soybeans, according to USDA’s revised planting survey. With a national average yield of 48.5 bushels per acre, total production is forecast at 3.68 billion bushels. The production estimate is a 19% drop from last year, and while within the range of pre-report estimates, the production figure was toward the low end.
USDA said South Dakota and Ohio combined account for almost half of the national reduction in acreage.
USDA pegged new-crop 2019-20 ending stocks at 755 mb, adjusting for the updated production estimate, a 100-million-bushel cut to export forecasts and 4 mb decline in residual use.
The average farm gate price was $8.40, unchanged from last month.
Old-crop ending stocks, at 1.07 billion bushels, are up 20 mb from last month.
Globally, the 2019-20 ending stocks forecast declined by 2.79 million metric tons to 101.74 million metric tons, just above the low end of pre-report expectations.
USDA lowered its forecast for Chinese imports by 2 million metric tons, to 85 mmt, reflecting lower crush forecasts.
For 2018-19, USDA estimated ending stocks at 114.53 mmt, up from July’s 113 mmt estimate. Brazilian production, at 117 mmt, and Argentina production, at 56 mmt, were unchanged from last month.