With the USDA already telegraphing that revisions will be made to 2019 U.S. corn and soybean acreage and yield numbers next month, the data contained in today’s report was greeted with a healthy dose of skepticism.
In updated monthly supply-demand estimates released Thursday, the USDA raised its 2019-20 corn ending stocks forecast by 335 million bu from last month to 2.01 billion bu. That ran counter to pre-report trade expectations for a reduction, making it seemingly negative news.
This month’s increase in new-crop ending stocks comes because the USDA is now projecting 2019 U.S. corn production at 13.88 billion bu, up from 13.68 billion last month. This year’s average expected corn yield of 166 bu/acre was unchanged from last month versus pre-report expectations it would be reduced significantly.
For soybeans, the new-crop ending stocks forecast for 2019-20 dropped to 795 million – slightly below the average pre-report trade estimate of 816 million.
Based on the smaller soybean seeded area noted in its June 28 acreage report (80.0 million acres versus March intentions of 84.6 million), the USDA slashed its forecast of 2019 U.S. soybean production by 305 million bu from last month to 3.85 billion.
At 48.5 bu/acre, the average expected 2019 soybean yield was down 1.0 bu from last month. This forecast should be viewed as highly tentative due to the lateness of the crop, indicated the USDA.
The USDA added that, because of the problems getting crops planted this spring in many parts of the U.S., acreage was being resurveyed in July. The results are expected to be incorporated into the production report due on August 12.
With the USDA already signalling that changes to the forecasts released today are coming next month, crop futures markets moved higher in post-report trade. Speculative funds were likely buying in anticipation of more excitement related to U.S. weather ahead.
August soybeans rose 4 1/2 cents to $8.99 and November was up 4 1/2 at $9.17 1/4.
September corn surged 9 1/4 cents to $4.44 1/4 and December gained 8 1/2 cents at $4.48.
Wheat futures soared after corn failed to give in to the seemingly bearish USDA supply news. September Chicago wheat spiked up 16 3/4 cents to $5.21 1/2, September Kansas City added 20 cents at $4.61 1/2 and September Minneapolis powered up 12 1/2 cents to $5.41 1/4.
Live cattle futures were higher today. However, lean hogs were lower, in response to lower than expected U.S. weekly export sales of pork to China.
Source: DePutter Publishing Ltd.
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