USDA/WASDE provides mixed data
The USDA expects the U.S. 2013 corn crop to drop, but not below the trade's expectations, while the soybean crop is raised compared to previous thoughts.
As a result, the CME Group corn and soybean markets are reacting to Thursday's numbers mixed.
In its September Crop Production Report, the USDA pegged the U.S. 2013/14 corn crop at 13.84 billion bushels, compared to the USDA's previous estimate of 13.763 billion bushels and the average trade estimate of 13.620 billion.
The USDA sees the U.S. corn yield averaging 155.3 bushels per acre, vs. its August estimate of 154.40 bu/acre and the average trade estimate of 153.69 bu/acre.
For soybeans, the USDA pegged the U.S. 2013/14 production at 3.4 billion bushels, compared to its August estimate of 3.255 billion bushels and the average trade estimate of 3.14 billion.
USDA sees the U.S. average soybean yield at 41.2 bu/acre vs. its August estimate of 42.60 bu/acre and the average trade estimate of 41.17 bu/acre.
On Thursday, the USDA pegged the U.S. 2013/14 wheat crop at 2.114 billion bushels.
Peter Meyer, PIRA Energy Group grain analyst says the USDA's increase in corn yield was a surprise.
"But, a deeper dig shows it’s almost all based on the southern crops, which we knew would be good. Most farmers in Illinois, Indiana, and Iowa have said that their crops lost anywhere from 20 to 30 bpa in the late-August heat. And drought in eastern Corn Belt states yet yields in Indiana at 166 bpa and Illinois at 165 bpa were left unchanged, while Iowa 'only' lost 1 bpa month over month."
Looking back at 2012/13, the Ending Stocks number below perceived pipeline of 700 million bushels signals a real problem for the Quarterly Stocks report on the 30th, he says.
"With the aforementioned stocks report on the docket, and the September FSA data on tap next week, I would not get too involved with the reaction to today’s report in corn," Meyer says.
For soybeans, everyone knows we have a problem but the extent of it has still not been seen yet, he says. "I expect that when all is said and done, the 2013 soybean crop will be smaller than the 2012 crop and once again, we will either export or consume every last bean produced."