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Four key questions for Friday's USDA report

The USDA will update its U.S. acreage estimates.

On Friday, the USDA will be releasing its September Supply/Demand and Crop Production Reports.

Here are some of the key questions ahead of Friday's report and my best estimate of what the USDA will say.  

#1. How much will the USDA change corn and soybean yields in this report?  

The USDA is hesitant to lower yields one month and then raise them a lot the next month. I look for yields to be very close to last month’s estimate. 

In August, the USDA pegged the average U.S. corn yield at 174.6 bushels per acre, above the last year's final estimate of 172.0 bushels per acre.

For soybeans, the USDA's August soybean yield was pegged at 50.0 bu./acre, nearly equal to a year ago's final estimate.

#2. Will the USDA increase corn and soybean acreage by 800,000 to 1 million acres? 

I look for 900,000 more corn acres, 250,000 more sorghum acres and 380,000 more soybean acres. 

In August, the USDA pegged the U.S. corn harvested acreage at 84.49 million and soybean acreage at 86.72 million.

#3. Will the USDA cut corn ethanol usage and cut corn exports? 

Yes, and I think it will be more than the trade estimates. 

Yes, and I think this will create larger than expected ending stocks.

In its previous estimate of U.S. corn for ethanol usage, the USDA pegged the total at 5.2 billion bushels.

Regarding U.S. corn exports, the USDA's August estimate at 2.4 billion bushels. 

#4. Will the USDA cut soybean crush, and increase soybean ending stocks? 

Yes, and I think this will create larger than expected ending stocks.

In its August estimates, the USDA pegged the U.S. soybean crush at 2.20 billion bushels. In July, the USDA pegged the U.S. 2021/22 soybean ending stocks at 155 million bushels.

What to watch for, Friday

A lot of negative news is built into the current price of corn and soybeans. Sometimes you need a negative report to put a bottom in. 

I would like to see a negative report and then prices close higher or at least in the top one-third of the trading range on Friday. 

Remember, the trade reaction to the report is more important than the report. 

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