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USDA Makes Few Changes In Corn, Soybean Production Thursday

Corn market adds a dime, wheat rallies 16¢.

DES MOINES, Iowa — The USDA made little changes for U.S. corn and soybean production and ending stocks estimates in its July monthly report released Thursday.

As a result, the markets dropped initially. However, since the 11:00 a.m. release, the farm markets have recovered.

At the close, the Sep. corn futures finished 9 1/4¢ higher at $4.44 1/4. Dec. corn futures finished 8 1/2¢ higher at $4.48.
 
Aug. soybean futures are 4 1/2¢ higher at $8.99. November soybean futures finished 4 1/2¢ higher at $9.17 3/4.

Sep. wheat futures closed 16 3/4¢ higher at $5.21 1/2.

August soymeal futures settled $1.70 per short ton higher at $312.40. August soy oil futures closed $0.09 higher at 28.18¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.20 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 150 points higher.

Corn

In its July Crop Production Report the USDA pegged the U.S. 2019 corn production at 13.875 billion bushels vs. the trade’s expectations of 13.3 billion bushels and the USDA’s June estimate of 13.68 billion.

The U.S. 2019 corn yield is estimated at 166 bushels per acre vs. the trade’s estimate of 164 bu./acre and the USDA’s previous estimate of 166 bu./acre.

Soybeans

For soybeans, the U.S. 2019 production is pegged at 3.84 billion bushels vs. the trade’s estimate of 3.871 billion bushels and the USDA’s June estimate of 4.15 billion.

The USDA sees the U.S. soybean yield averaging 48.5 bu./acre vs. the trade’s expectation of 48.4 bu./acre and the governmental agency’s previous estimate of 49.5.
 

U.S. 2018/19 Ending Stocks

In its report, the USDA pegged the U.S. 2018/19 corn ending stocks at 2.34 billion bushels vs. the trade’s estimate of 2.21 billion bushels and the USDA’s June estimate of 2.19 billion.

For soybeans, the old-crop ending stocks were estimated at 1.05 billion bushels vs. the trade’s expectations of 1.05 billion and the USDA’s June estimate of 1.07 billion.

U.S. 2019/2020 Ending Stocks

For corn, the new-crop ending stocks are pegged at 2.01 billion bushels vs. the trade’s expectations of 1.589 billion bushels and the USDA’s June estimate of 1.67 billion.

For soybeans, new-crop ending stocks are estimated at 795 million bushels vs. the trade’s expectation of 816 million bushels and the USDA’s June estimate of 1.045 billion bushels.

USDA pegged the U.S. new-crop wheat ending stocks at 1.00 billion bushels vs. the trade’s expectation of 1.031 billion and the USDA’s June estimate of 1.072 billion.

World 2018/19 Ending Stocks

In its report Thursday, the USDA pegged the world corn ending stocks at 328 million metric tons vs. the trade’s expectation of 327 million mt. and its June estimate of 325 mmt.

For soybeans, world ending stocks are estimated at 113 mmt. vs. the trade’s estimate of 113 mmt. and the USDA’s June estimate of 112 mmt.

The world wheat stocks are pegged at 275 mmt. vs. the trade’s expectation of 275 mmt. and the USDA’s June estimate of 276 mmt.

Trade Response

Sal Gilbertie, Teucrium Trading, says that on the surface, today’s USDA/WASDE report showed some tightening of wheat supplies versus last month, but overall global supplies of wheat are more than adequate.

"The underlying story in today’s report is definitely the global tightening of the soybean balance sheet, with global bean stocks down over 7% and global production down over 9%. Global usage of soybeans is projected higher, even in the face of the swine flu pandemic in Asia. All eyes will be on the August WASDE for more clarity around yields and acres, which are the big unknown variables right now," Gilbertie says.

Jack Scoville, PRICE Futures Group, says that the WASDE report's world wheat production causing increased U.S. export demand potential was the bullish highlight. 

"USDA used the June acres for corn and beans and that led to reduced beans and increased corn production estimates that no one thinks is accurate.  The naysayers might be right.  We pivoted to weather right away, as July is supposed to be hot and dry.  These crops are so far behind that hot and dry in July could really hurt the corn and maybe the beans.  Reversal day in the corn, so maybe we got some upside coming tomorrow and next week."

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