By Linda H. Smith, DTN Markets Editor
WASHINGTON (DTN) — USDA’s new-crop corn numbers did not disappoint the trade, with yields and production even lower than pre-report expectations, which were considered bullish in themselves.
New-crop soybean prospects also are bullish, with acres, yields and production all down.
In its acreage revisions, based on the re-survey of Minnesota, Montana, North Dakota and South Dakota because of the wet spring weather, USDA found no change in corn acreage versus the June estimate. It did reduce soybean planted acreage by 50,000 acres in North Dakota and 200,000 acres in South Dakota. Other spring wheat was reduced 500,000 acres in Montana and 450,000 acres in North Dakota, and durum dropped 100,000 in Montana and 200,000 in North Dakota.
The reports should be viewed as bullish for corn and soybeans and neutral for wheat, according to DTN Analyst John Sanow.
For Crop Production: http://usda.mannlib.cornell.edu/…
For World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
CORN
Corn was on center stage, coming in at a yield of 153 bushels an acre, 2 bushels an acre below the average trade estimate and only a touch above last year’s weather-reduced yield of 152.8 bpa.
USDA used planted acreage of 92.28 million acres and harvested, 84.39 million, up from 88.19 planted and 84.39, respectively, last year.
As a result, production came in at just 12.91 billion bushels, below trade estimates of 13.08 bb.
Ending stocks for old-crop corn rose 7{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} from July’s estimate of 880 million bushels to 940 million, outstripping average trade expectations of 923 million. New-crop ending stocks, however, were pegged at 714 million, down 18{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} from 870 million in July and 4{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} below the average trade estimate of 741 million. USDA boosted expected corn use for ethanol back to 5.05 billion, but trimmed several other use categories, bringing 2011 total use to 13.16 billion bushels, putting the stocks-to-use ratio at 5.4{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}.
“Given corn production fell more than expected and domestic stocks-to-use shrank to the second tightest on record at 5.4{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}, trailing just the 1995-1996 marketing year of 5{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}, corn should have an explosively higher day Thursday,” Sanow said.
USDA estimated the national average cash price at $6.70 for the new crop, up from $5.25 for the old crop.
Grain sorghum yield, reflecting the historic drought in the Southern Plains, came in at only 54.8 bpa, 10{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} below the trade’s 64 bpa and down 74{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} from last year’s 71.8 bpa.
SOYBEANS
The estimated soybean yield, at 41.4 bpa, is down from 43.5 bpa last year and below average trade expectations for 42.8 bpa. Production, at 3.06 billion bushels, also is below trade guesses of 3.19 billion and is down from 3.33 billion last year.
USDA reported acreage at 74.96 million acres, down from 77.4 million last year; harvested is pegged at 73.82, compared with 76.62 last year.
Like corn, at 230 million bushels, old-crop ending stocks rose 15{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} from July’s estimate of 200 million; new-crop stocks, at only 155 million bushels, are 11{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} below July’s 175 million and 10{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} below the trade’s 172-million average. Stocks-to-use is just 4.9{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} versus 7{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} for the 2010 crop.
“Beans should also post strong gains Thursday, considering stocks-to-use fell back below 5{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} to 4.9{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}, though some traders may question the larger-than-expected decline in yield, as weather has turned more favorable in August for crop development,” Sanow said.
USDA pegs the average cash price for 2011 soybeans at $13.50, up from $11.35 for the 2010 crop.
WHEAT
Most of USDA’s wheat production numbers are slightly below trade estimates as well: The agency pegged all wheat production at 2.08 billion bushels; spring, 522 million, and durum 57 million, all below pre-report averages. Only winter wheat came in slightly above expectations, at 1.498 vs. 1.491 billion.
New-crop wheat ending stocks were a non-event, pegged at 671 million bushels versus 670 mb in July and right on the trade’s average guess.
“Wheat will take to a follower role, as ending stocks for 2011-2012 were even with the average pre-report estimate and only 1 mb above July,” Sanow said.
WORLD PRODUCTION AND ENDING STOCKS
The most notable changes in world numbers were wheat ending stocks, which rose from July levels for both the 2010 and 2011 crops. World corn stocks rose modestly for both years, while soybean stocks rose for the 2010 crop but fell a million metric tons for the 2011 crop.
“World ending stocks should be viewed as neutral for corn, slightly bullish for beans and bearish for wheat for the 2011-2012 marketing year,” Sanow said. “World ending stocks in wheat came in well above the average estimate, 188.87 million metric tons against the expected 182.75 mmt. Ending stocks-to-use climbed to 28{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}, a more comfortable level and supportive of the strong carry in futures spreads.
“Corn was slightly above (0.46 mmt) the average estimate, but well below July’s 120.88 mmt; however, stocks-to-use remained unchanged at 13.2{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}. Soybeans came in 0.87 mmt below the average estimate and 4.93 mmt under July. Stocks-to-use remains at a historically comfortable level of 23.2{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}”
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Posted with DTN Permission by Haylie Shipp
