USDA Corn, Soybean Output Forecasts Decline on Lower Yields
U.S. corn and soybean production estimates were lowered amid declining yield forecasts, according to one of several Department of Agriculture reports released on Friday.
Corn output in the 2018-2019 marketing year that ends on August 31 is pegged at 14.42 billion bushels, down from the USDA’s December estimate for 14.626 billion bushels. The government didn’t release a January report due to the partial government shutdown.
Yields are forecast at 176.4 bushels an acre, down from the December outlook for 178.9 bushels an acre, the USDA said.
Corn inventories on August 31 are estimated at 1.735 billion bushels, down from 1.781 billion two months ago and 2.14 billion the previous year.
Soybean production is now projected at 4.544 billion bushels by the government, down from 4.6 billion two months ago. Yields are seen at 51.6 bushels an acre vs. the previous estimate of 52.1 bushels, the agency said.
U.S. ending stockpiles of soybeans are now seen at 910 million bushels, down from the prior forecast for 955 million, but that’s still more than double the previous year.
Researcher Allendale said before the report it expected corn stockpiles of 1.708 billion bushels and soybean inventories of 926 million bushels.
Wheat inventories in the U.S. are now seen at 1.01 billion bushels, up from 974 million projected in December, as less will be used in feed and seed domestically. Allendale said it had expected stocks of 989 million bushels.
South America Production
Soybean output in Brazil, which was a key data point anticipated by traders, was pegged at 117 million metric tons, down from the December forecast for 122 million tons. Dry weather in the South American country has reduced crop prospects in recent months.
Argentina’s soybean production estimate was lowered to 55 million metric tons from 55.5 million tons two months ago.
Dryness in parts of south and center-west in Brazil led to the lower estimate, while a reduction in harvested areas of Argentina were partially offset by increased yields in the country, where excessive rain flooded out some fields, according to the USDA.
The government also released its quarterly grain stocks report for December 1, which also was delayed by the shutdown, on Friday.
Corn in storage on December 1 totaled 12 billion bushels, down 5% from the same date in 2017, the USDA said. On-farm stocks totaled 7.45 billion bushels, down 4% year-over-year, while off-farm inventories were 4.5 billion bushels, a 7% decline.
Soybean stockpiles at the start of December totaled 3.74 billion bushels, an 18% increase from the previous year. On-farm stocks were reported at 1.94 billion bushels, a 30% increase, while off-farm inventories rose 7% year-over-year to 1.8 billion bushels.
All wheat stored totaled 2 billion bushels, a 7% increase. Stocks on farms jumped 28% to 504 million bushels while off-farm inventories were up 1% to 1.5 billion bushels.
Traders weren’t swayed by the reports, saying they contained few surprises. Prices moved only slightly right after they were released, but moved back into little-changed territory shortly thereafter.
Corn futures closed 2¼¢ lower at $3.74¼ a bushel on the Chicago Board of Trade.
Soybeans ended the session up 3¼¢ to $9.16½ a bushel in Chicago. Soy meal added $1.10 to $306.60 a short ton and soy oil gained 0.05¢ to 30.86¢ a pound.
Wheat for March delivery rose 4¾¢ to $5.18 a bushels while Kansas City futures declined 1¾¢ to $4.94½ a bushel.
Larry Glenn, a commodities broker at Frontier Ag in Quinter, Kansas, said the reports were mostly routine, especially considering they were delayed due to the government shutdown.
“We waited for two months for these reports ... then we get this and it was almost uneventful,” he said. “I kept waiting for a move (in prices) thinking maybe people weren’t seeing the numbers.”
Brian Grossman, a market strategist with Zaner Ag Hedge in Chicago, took a more lighthearted approach to the reports that were released Friday.
“The biggest surprise was that this was one of the most boring report releases I have ever seen,” he said. “Shut the USDA back down.”