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12

July USDA Supply & Demand

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The USDA did not see a reason to adjust corn or bean yields in July as we expected. They very seldom change yields on this report. When the updated plantings were counted, corn and bean production was increased by 715 million bushels and 30 million respectfully. Wheat production was raised 54 million.

 
 
2018-19 USDA U.S. Yield (bu/acre)
 
USDA
July
2018-19
Average Trade Est.
Range of
Trade Est.
USDA
June
2018-19
Corn
174.0
174.9
172.6-179.5
174.0
Soybeans
48.5
48.6
47.0-49.5
48.5

2018-19 USDA U.S. Production (bln bu)
 
USDA
July
2018-19
Average Trade Est.
Range of
Trade Est.
USDA
June
2018-19
Corn
14.230
14.269
14.045-14.683
14.040
Soybeans
4.310
4.314
4.200-4.402
4.280

2018-19 Wheat Production (bln bu)
 
USDA
July 2018
Average Trade Est.
Range of
Trade Est.
USDA
June 2018
All Winter
 1.193
1.196
1.178-1.218
1.198
HRW
 0.657
0.650
0.634-0.675
0.650
SRW
 0.303
0.316
0.305-0.334
0.316
White
 0.262
0.229
0.202-0.244
0.232
All Wheat
 1.881
1.858
1.825-1.923
1.827

Here are some of the slides from the presentation prepared for the Secretary’s briefing:

 

 

The USDA signaled that they would adjust their numbers for the new tariffs levied against U.S. crop exports in this report and took 250 million bushels out of U.S. exports to adjust.

Traders worried that might bring a shock to the market were relieved the USDA left U.S. and world corn carryover stocks relatively unchanged.

Soybeans didn’t fare so well. The USDA cut exports by 250 million dropping 195 of those to the carryout. Click here for the slides used in the World Agricultural Briefing to the USDA Secretary.


 
2017-18 USDA U.S. Grain Carryout (bln bu)
 
USDA
July 2018
Average Trade Est.
Range of
Trade Est.
USDA
June 2018
Corn
2.027
2.107
2.052-2.177
2.102
Soybeans
0.465
0.507
0.478-0.530
0.505
Wheat
1.100
   
1.080

2018-19 USDA U.S. Grain Carryout (bln bu)
 
USDA
July 2018
Average Trade Est.
Range of
Trade Est.
USDA
June 2018
Corn
1.552
1.712
1.545-1.922
1.577
Soybeans
0.580
0.471
0.390-0.571
0.385
Wheat
0.985
0.973
0.924-1.021
0.946


World carryout for corn next year will be down almost 40.0 million tons from the stocks on August 31, 2018. Bean stocks are expected to grow by only 2.25 million tons. Wheat stocks are expected to fall by nearly 13.0 million tons.



2017-18 USDA World Grain Carryout (million tons)
 
USDA
July 2018
Average Trade Est.
Range of
Trade Est.
USDA
June 2018
Corn
191.73
191.42
189.5-192.88
192.69
Soybeans
96.02
91.76
89.00-93.00
92.49
Wheat
 273.50
272.46
271.00-274.50
272.37

2018-19 USDA World Grain Carryout (million tons)
 
USDA
July 2018
Average Trade Est.
Range of
Trade Est.
USDA
June 2018
Corn
151.96
156.27
151.00-163.00
154.69
Soybeans
98.27
88.15
85.00-92.00
87.02
Wheat
260.88
265.50
262.00-268.00
266.16

 

The big charts of world ending stocks compared to usage in today’s reports show big stocks now, and smaller next year. These charts don’t look nearly as bad as the market and current prices feel to me.

The USDA mid-point average farm price estimate for next year was $3.80 per bushel down 10 cents from last month but up 40 cents from the current year average. The bean mid-point average was $9.25 down 75 cents from last month and 10 cents from this year.

The wheat mid-point average was $5.00 down 10 cents from last month but up 27 cents from last year.

The USDA said that after the smoke clears on the trade wars underway everything will be OK. They don’t have a big crystal ball but that’s their best guess. We agree. Batten down the hatches, it will get better.

 


Source: Bloomberg, Reuters, USDA

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  1. wwmap.png 7/12/2018 9:40:01 AM
  2. wwyield.png 7/12/2018 9:40:01 AM
  3. durumwheat.png 7/12/2018 9:40:01 AM
  4. objectivetable.png 7/12/2018 9:40:01 AM
  5. sprwheatcond.png 7/12/2018 9:40:01 AM
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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.