USDA's Sept. Crop and Supply-Demand reports - Surprise?

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USDA issued its September Crop Production estimate for corn and soybeans, cutting yields and production slightly, but raising the carryout for new crop corn, and leaving its estimate of harvested acres untouched from August.  To no surprise the drought was blamed for the shortfall in corn, as well as in soybeans, where USDA estimated a reduced yield, but again, did not project any increase in acreage abandonment as analysts and the market expected.

2012 Corn estimate data

In the USDA September Crop Production Report, the corn crop was estimated at 10.727 bil. bu., which compares to the 10.778 bil. estimated in August.  Last month the average yield was estimated at 123.4 bu. per acre, and was only dropped to 122.8 bu. per acre for September.  USDA did not change its estimate of the harvested acreage at 87.361 mil. acres, which is 91% of planted acres.

USDA said, “The September 1 corn objective yield data indicate the lowest number of ears per acre since 2005 for the combined 10 objective yield States (Iowa, Illinois, Indiana, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin).  As of September 2, only twenty-two percent of the corn acreage was rated in good to excellent condition in the 18 major producing States, down 2 percentage points from one month earlier and down 30 percentage points compared to the same time last year. Fifty-two percent of the acreage was rated in very-poor to poor condition compared to only 21 percent rated in these two categories last year at this time.”

Cornbelt state averages:

  • IL-110 bpa, down from 116 last month,--29,700 average population—24,000 ears per acre
  • IN-100 bpa, unchanged--29,250 average population—26,500 ears per acre
  • IA-140 bpa, down from 141--30,150 average population—28,250 ears per acre
  • KS-91 bpa, down from 93—23,050 average population—20,350 ears per acre
  • MI-114 bpa, unchanged
  • MN- 156 bpa, up from 155--30,000 average population—29,450 ears per acre
  • MO-75 bpa, unchanged—26,650 average population—23,050 ears per acre
  • NE-145 bpa, down from 147—26,150 average population—24,500 ears per acre
  • ND-105 bpa, up from 100
  • OH-126 bpa, unchanged—29,200 average population—27,700 ears per acre
  • SD-96 bpa, down from 98—24,200 average population—22,150 ears per acre
  • WI-130 bpa, down from 132—29,000 average population—27,650 ears per acre

In the USDA’s September Supply-Demand Report an increase in beginning stocks offset lower production to start the marketing year.  Exports were lowered 10 mil. bu. for the old crop, and USDA also reduced old crop feed use by 150 mil. bu. as a result of feeding some of the available supplies from the new crop.  According to USDA, “This is up more than 700 million bushels from a year ago. Early new-crop corn use is expected to displace use of 2011 old-crop corn and boost old-crop inventories on September 1. As a result, early new-crop usage reduces the feed and residual calculation in the balance sheet.”

For the new crop, USDA lowered exports by 50 mil. bu. due to competition from South American exporters, raised the feed and residual by 75 mil. bu. and reset the ending stocks up by 83 million to 733 mil. bu. on Aug 31. 2013.  That compares to 650 mil. ending stocks estimated in August.  The average price range was dropped by 30 cents to $7.20 to 8.60.

2012 Soybean estimate data

USDA forecast the soybean crop at 2.634 bil. bu. with yield at 35.3 bu. per acre, down 0.8 bu. from the August estimate.  Harvested acreage was placed at 74.635 mil. acres, unchanged from the August estimate.

Cornbelt state averages

  • IL-37 bpa, unchanged from the August estimate—1,466 pods per 18 sq. ft.
  • IN-37 bpa, unchanged from the August estimate—1,388 pods
  • IA-39 bpa, down 4 bu. from August—1,512 pods
  • KS-21 bpa, down 1 bu.—1,038 pods
  • MI-37 bpa, up 1 bu.
  • MN- 38 bpa, unchanged—1,587 pods
  • MO-28 bpa, down 2 bu.—1,347 pods
  • NE-40 bpa, down 3 bu.—1,406 pods
  • ND-28 bpa, unchanged—1,308 pods
  • OH-40 bpa, down 2 bu.—1,674 pods
  • SD-28 bpa, down 3 bu.—1,171 pods
  • WI-36 bpa unchanged

USDA says, “The September objective yield data for the combined 11 major soybean-producing States (Arkansas, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and South Dakota) indicate a lower pod count compared with last year, as hot, dry weather during bloom hampered development of the crop in many areas. Compared with final counts for 2011, pod counts are down in all published States. The largest decrease from 2011’s final pod count is expected in Nebraska, down 735 pods per 18 square feet. As of September 2, thirty percent of the United States soybean crop was rated in good to excellent condition, 26 percentage points behind the same week in 2011. During August, good to excellent ratings decreased across the western Corn Belt and into the northern and central Great Plains, but increased in 11 of the 18 published States as beneficial rain fell during the month.”

USDA’s September Supply-Demand Report indicates a 58 mil. bu. drop in soybean production compared to the August estimate.  The export estimate was lowered 55 mil. bu to 1.055 bil. and the crush was lowered 15 mil. to 1.5 bil. which is the least since the 1996/97 marketing year, and will result in lower meal exports and domestic meal consumption.  Ending stocks were retained at the 115 mil. pipeline minimum. For the new crop the average season price was retained at $15-$17 per bushel, with meal prices up $25 to $485-$515, and oil prices up 1-cent to 54 to 58 cents per pound.

The old crop numbers were adjusted by USDA to reflect a 1.705 bil. bu. crush and a 1.36 bil. bu. export level.  The ending stocks for the old crop was lowered 15 mil. to 130 mil. bu. 

Summary:

USDA lowered production slightly on the new corn crop, but helped the balance sheet with more available carry-in for the new marketing year, from higher ending stocks in the old crop.  USDA cut demand for the soybean crop to keep ending stocks at the 115 mil. minimum, reducing both exports and crush significantly compared to the old crop year.

Source: FarmGate blog





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