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12

August USDA Supply & Demand

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Traders and analysts were caught off guard in today’s latest corn and soybean guidance from the USDA. The bullish production update will surely temp the mostly short specs to offset positions, helping to propel corn and beans higher. Overall, the USDA left cash prices only slightly adjusted higher, telling the trade they still expect supplies to gain substantially over last year. We expect traders to adjust their bean yield outlook dependent on critical late August weather and while wheat values should follow a potential short term correction in corn. Click here for a printable report summary sheet.

U.S. soybean production for 2013/14 is forecast at 3.255 billion bushels, down 165 million due to lower harvested area and yields vs trade guesses of 3.338 billion and 43.47 bu/acre. Harvested area is forecast at 76.4 million acres, down 0.5 million from the July projection. U.S. soybean exports were reduced 65 million bushels to 1.385 billion while soybean crush was lowered as higher prices reduce prospective exports for soybean meal. Soybean ending stocks are projected at 220 million bushels, down 75 million from last month.

The U.S. season average soybean price for 2013/14 is forecast at $10.35 to $12.35 per bushel, up 60 cents on both ends. Soybean meal prices are forecast at $305 to $345, up 15 dollars at the midpoint.

Corn production for 2013/14 was lowered 187 million bushels to 13.8 billion. The first survey based corn yield forecast, at 154.4 bushels per acre, is down 2.1 bu/acre from last month’s projection. Corn beginning stocks for 2013/14 are projected 10 million bushels lower with a 15-million-bushel increase in 2012/13 exports only partly offset by a 5-million-bushel increase in imports. Feed and residual use for 2013/14 is lowered 50 million bushels this month with the smaller crop. Exports are projected 25 million bushels lower with reduced domestic supplies and increased foreign competition.

Corn ending stocks for 2013/14 are projected 122 million bushels lower while the average farm gate price was raised just 10 cents/bu on both ends of the range to $4.50 to $5.30 per bushel. Interesting to see the USDA expects cash prices received by farmers to remain above cash bid levels through the fall as producers who forward-priced corn earlier in the year support the weighted average farm gate price.

Over in wheat, the USDA kept U.S. wheat production was held steady for 2013/14 at 2.114 billion bushels while reducing ending stocks on a small upward adjustment in exports by 25 million bushels based on “Strong early season sales and an increased outlook for China imports”. Ending stocks are projected 25 million bushels lower.

The projected range for the 2013/14 season average farm price was lowered 10 cents per bushel at the midpoint to $6.40 to $7.60 per bushel. Although U.S. wheat supplies tightened up, the USDA see’s larger world supplies holding U.S. export down and therefore help cash price outlook steady.

2012-13 USDA World Grain Carryout (million tons)

 

USDA Aug.
2012 - 2013

Average
Trade Est.

Range of
Trade Est.

USDA Aug.
2012 - 2013

Corn

0.719

0.725

0.537 - 0.819

0.729

Soybeans

0.125

0.122

0.109 - 0.135

0.125

Wheat

0.718

 

 

0.718

2012-13 USDA World Grain Carryout (million tons)

 

USDA Aug.
2012 - 2013

Average
Trade Est.

Range of
Trade Est.

USDA Aug.
2012 - 2013

Corn

123.11

124.042

122.82 - 126.00

123.57

Soybeans

62.22

61.417

60.25 - 62.50

61.52

Wheat

174.42

 

 

174.47

2013-14 USDA U.S. Grain Yield (bu/acre)

 

USDA Aug.
2013 - 2014

Average
Trade Est.

Range of
Trade Est.

USDA Aug.
2013 - 2014

Corn

154.4

157.721

154.00 - 161.20

156.50

Soybeans

42.6

43.472

42.00 - 44.40

44.50

Wheat

46.2

 

 

46.20

2013-14 USDA U.S. Grain Production (bln bu)

 

USDA Aug.
2013 - 2014

Average
Trade Est.

Range of
Trade Est.

USDA Aug.
2013 - 2014

Corn

13.763

13.980

13.485 - 14.269

13.950

Soybeans

3.255

3.338

3.220 - 3.400

3.420

Wheat

2.114

2.112

2.025 - 2.148

2.114

2013-14 USDA U.S. Grain Carryout (bln bu)

 

USDA Aug.
2013 - 2014

Average
Trade Est.

Range of
Trade Est.

USDA Aug.
2013 - 2014

Corn

1.837

1.971

1.498 - 2.431

1.959

Soybeans

0.220

0.263

0.131 - 0.306

0.295

Wheat

0.551

0.573

0.489 - 0.653

0.576

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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.