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Market insider: Latest Report Shows Revised Production Estimates
By Brian Hoops
Last Monday, the USDA released their latest monthly supply/demand report. The November report is historically not very significant and this report followed this historical pattern. The USDA will not present another production figure until the January, “final” report. (The final report is always subject to USDA revisions). However, in December the USDA will issue an updated demand report and a newly forecasted ending stocks figure.
In the report, the USDA estimated corn production at 12.02 billion bushels, down slightly from the October forecast and 8 percent below 2007.Based on conditions as of November 1, yields are expected to average
153.8 bushels per acre, down 0.1 bushel from October but 2.7 bushels above last year. If realized, this will be the second highest yield on record, behind 2004, and production will be the second largest, behind last year.
Harvested acres were left unchanged at 74.4 million. The Illinois corn yield was raised two bpa to 179 bpa while Iowa held steady at 172 bpa. Yield cuts were made in Ohio, down 7 bpa to 140 bpa, North Dakota down 3 bpa, South Dakota down 4 bpa, and Arkansas down 3 bpa. The USDA raised the ending stocks forecast to 1,124 mb, up 36 mb based on a 50 mb cut in the corn export profile to 1,900 mb, with no other demand changes. U.S. corn use for ethanol was held steady at 4,000 mb with feed/residual at 5,300 Mil Bu. World corn end stocks were elevated by 4.55 mmts to 110.12 mmts amid enlarged beginning stocks and a modest cut in exports to 82.33 mmts.
The USDA forecast soybean production at 2.92 billion bushels, down less than 1 percent from the October forecast but up 9 percent from last year. If realized, this will be the fourth largest production on record. Based on November 1 conditions, yields are expected to average 39.3 bushels per acre, down 0.2 bushel from October 1 and down 2.4 bushels from 2007. Compared with October 1, yields are forecast lower or unchanged across the Corn Belt and Great Plains, with the exception of Illinois, Indiana, and Missouri. The Illinois soybean yield was raised 1 bpa with Iowa steady at 46 bpa. The Ohio and Wisconsin soybean yields fell 2 bpa to 36 bpa and 34 bpa. Area for harvest in the U.S. is forecast at 74.4 million acres, unchanged from October 1 but up 16 percent from 2007.
The USDA projected U.S. soybean end stocks at 205 mb, unchanged from last month. The 17 mb reduction in the crop size was offset by a 3 mb fall in residual and a 15 mb slowdown in crush to 1,745 mb. No change was made in exports, despite the current U.S. export pace exceeding last year’s pace at this time. In 2007/08, exports reached 1.161 bb, however the USDA is only forecasting this year’s exports at 1.020 bb. In fact, in 2006/07, exports were also stronger at 1.116 bb. As the USDA realizes the stronger export pace, ending stocks should begin to tighten. 2008/09 world soybean stocks were estimated at 54.06 mmts, down slightly from the October estimate of 55.24 mmts. The USDA lowered the 2009 Brazilian soy crop by 2.50 mmts to 60 mmts. The Argentine crop held steady at 50.50 mmts. Finally, U.S. wheat stocks rose only 2 mb to 603 mb. The USDA only made one change, lowering seed usage
by the 2 mb to fractionally reduce total demand to 2.302 bb. Exports were left unchanged at 1.0 bb, however
this could be lowered in future reports as the U.S. export profile is running below projections. World wheat
stocks were raised just slightly to 145.25 mmts from 144.41 mmts last month. The USDA lowered the Australian wheat crop to 20.00 mmts, down 1.5 mmts and the Chinese wheat crop to 113.00 mmts, down 1 mmts; but increased the EU crop from 147.17 mmts to 150.60 mmts. The Argentine wheat crop saw a small decline in production of 1.0 mmts to 11.00 mmts.
In the report, the USDA estimated corn production at 12.02 billion bushels, down slightly from the October forecast and 8 percent below 2007.Based on conditions as of November 1, yields are expected to average
153.8 bushels per acre, down 0.1 bushel from October but 2.7 bushels above last year. If realized, this will be the second highest yield on record, behind 2004, and production will be the second largest, behind last year.
Harvested acres were left unchanged at 74.4 million. The Illinois corn yield was raised two bpa to 179 bpa while Iowa held steady at 172 bpa. Yield cuts were made in Ohio, down 7 bpa to 140 bpa, North Dakota down 3 bpa, South Dakota down 4 bpa, and Arkansas down 3 bpa. The USDA raised the ending stocks forecast to 1,124 mb, up 36 mb based on a 50 mb cut in the corn export profile to 1,900 mb, with no other demand changes. U.S. corn use for ethanol was held steady at 4,000 mb with feed/residual at 5,300 Mil Bu. World corn end stocks were elevated by 4.55 mmts to 110.12 mmts amid enlarged beginning stocks and a modest cut in exports to 82.33 mmts.
The USDA forecast soybean production at 2.92 billion bushels, down less than 1 percent from the October forecast but up 9 percent from last year. If realized, this will be the fourth largest production on record. Based on November 1 conditions, yields are expected to average 39.3 bushels per acre, down 0.2 bushel from October 1 and down 2.4 bushels from 2007. Compared with October 1, yields are forecast lower or unchanged across the Corn Belt and Great Plains, with the exception of Illinois, Indiana, and Missouri. The Illinois soybean yield was raised 1 bpa with Iowa steady at 46 bpa. The Ohio and Wisconsin soybean yields fell 2 bpa to 36 bpa and 34 bpa. Area for harvest in the U.S. is forecast at 74.4 million acres, unchanged from October 1 but up 16 percent from 2007.
The USDA projected U.S. soybean end stocks at 205 mb, unchanged from last month. The 17 mb reduction in the crop size was offset by a 3 mb fall in residual and a 15 mb slowdown in crush to 1,745 mb. No change was made in exports, despite the current U.S. export pace exceeding last year’s pace at this time. In 2007/08, exports reached 1.161 bb, however the USDA is only forecasting this year’s exports at 1.020 bb. In fact, in 2006/07, exports were also stronger at 1.116 bb. As the USDA realizes the stronger export pace, ending stocks should begin to tighten. 2008/09 world soybean stocks were estimated at 54.06 mmts, down slightly from the October estimate of 55.24 mmts. The USDA lowered the 2009 Brazilian soy crop by 2.50 mmts to 60 mmts. The Argentine crop held steady at 50.50 mmts. Finally, U.S. wheat stocks rose only 2 mb to 603 mb. The USDA only made one change, lowering seed usage
by the 2 mb to fractionally reduce total demand to 2.302 bb. Exports were left unchanged at 1.0 bb, however
this could be lowered in future reports as the U.S. export profile is running below projections. World wheat
stocks were raised just slightly to 145.25 mmts from 144.41 mmts last month. The USDA lowered the Australian wheat crop to 20.00 mmts, down 1.5 mmts and the Chinese wheat crop to 113.00 mmts, down 1 mmts; but increased the EU crop from 147.17 mmts to 150.60 mmts. The Argentine wheat crop saw a small decline in production of 1.0 mmts to 11.00 mmts.
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