USDA raises U.S. 2019 corn, soybean production
DES MOINES, Iowa —- The U.S. farmers grew a bigger 2019 corn crop than the trade and the government thought.
As a result, the CME Group’s farm markets fell hard and then recovered Friday, following the 11:00 a.m. CT release of the USDA’s January Crop Production, Supply/Demand, Quarterly Grain Stocks and WASDE Reports.
At the close, the March corn futures finished 2½¢ higher at $3.85¾. May futures ended 2¾¢ higher at $3.92¾.
March soybean futures settled 2½¢ higher at $9.46. May soybean futures finished 2½¢ higher at $9.59.
May wheat futures settled 2½¢ higher at $5.64¾.
In the outside markets, the NYMEX crude oil market is $0.44 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 133 points lower. The Dow crossed 29,000 for the first time in history.
U.S. 2019 Corn Production
For 2019 corn yield, the USDA pegged it at 168 bushels per acre, compared with the average analysts’ estimate of 166 bushels per acre vs. 167 last month.
USDA estimated the U.S. 2019 corn output at 13.692 billion bushels vs. the trade’s expectations of 13.513 billion bushels and the USDA’s December estimate of 13.661 billion.
U.S. 2019 Soybean Production
The USDA says the U.S. 2019 average soybean yield ended at 47.4 bushels per acre vs. the trade’s expectations of 46.6 bushels per acre and December’s estimate of 46.9 bushels per acre.
The 2019 U.S. soybean production totaled 3.558 billion bushels vs. the trade’s expectations of 3.51 billion bushels and the USDA’s December estimate of 3.55 billion.
In 2018, the U.S. farmers grew a soybean crop totaling 4.428 billion bushels.
U.S. Ending Stocks 2019/2020
For corn, U.S. stocks at the end of the marketing year (Sept. 1) are estimated at 1.89 billion bushels vs. the trade’s expectations of 1.77 billion bushels and the USDA’s December estimate of 1.910 billion.
The soybean ending stocks are pegged at 475 million bushels vs. the trade’s expectations of 431 million bushels and the USDA’s estimate in December of 475 million.
For wheat, U.S. ending stocks are 965 million bushels vs. the trade’s expectations of 970 million and the USDA’s previous estimate of 974 million.
Dec. 1 U.S. Quarterly Grain Stocks
The USDA pegged corn stocks, as of December 1, were pegged at 11.389 billion bushels vs. the trade’s expectations of 11.47 billion.
For soybeans, December 1 stocks were pegged at 3.252 billion bushels vs. the trade’s expectations of 3.19 billion.
USDA pegged the U.S. wheat December 1 stocks at 1.834 billion bushels vs. the avg. trade estimate of 1.914 billion bushels.
U.S. Winter Wheat Seedings
USDA pegged the 2019/2020 U.S. winter wheat acreage at 30.8 million vs. the trade's expectation of 30.66 million and the USDA's final 2019 estimate of 31.15 million.
World Crop Production
Brazil’s 2019/2020 corn output was at 101 million metric tons and soybean output at 123 million metric tons.
Sal Gilbertie, Teucrium Trading, says this was not a market moving report.
“But it does emphasize the fact that demand is rising globally for all grains, and we are using more coarse grains than we are producing for the second consecutive year. There will be questions as to the accuracy of harvested acres and for corn demand from ethanol producers moving forward, but the big question will be what adjustments the USDA will make to assumptions for the February WASDE after the signing of the U.S./China trade deal next week,” Gilbertie says.
Jack Scoville, PRICE Futures Group, says that investors haven’t made up their minds about whether the report was bearish or bullish.
“It was a mixed report, with U.S. corn and bean production higher instead of lower. Yet, the quarterly stocks data was positive for corn and wheat and not for beans. The world data is kind of positive as well. A very interesting market reaction – makes me wonder if the market was talking bullish and leaning bearish going into the numbers, especially on the corn and to a lesser extent the wheat. Even beans have moved to unchanged, after trading lower after the report. A very interesting reaction,” Scoville says.
Jason Roose, U.S. Commodities, says that the market may have had this negative news dialed in.
“Initial reaction in today’s January USDA Crop Report was negative, with U.S. corn and bean yields increasing slightly, U.S. ending stocks reduced by 20 million bushels with world ending stocks also reduced slightly, and feed usage raised 250 million bushels,” Roose says.
Roose added, “With very little risk premium in the grain market, the trade may add premium with uncertainties in South America weather. The key to this report was how much of the negative news was dialed in.”
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