July reports from the Department of Agriculture offered little surprise to traders, including when USDA stuck with the much-maligned June Acreage report data.
While those figures have taken their lumps in the last few weeks – and USDA has already committed to resurveying producers with an eye on an August update – American Farm Bureau Federation Chief Economist John Newton said seeing those numbers pop up again was the expected outcome for today’s World Agricultural Supply and Demand Estimates report.
“I don’t really think anybody thought USDA was going to do much,” he said in an interview with Agri-Pulse. “I mean, what additional information do you really have to change the acreage number or the yield number at this point? There’s still a residual hangover from that June Acreage report.”
Last month, USDA increased its estimate for corn acreage 3% over last year’s plantings to 91.7 million acres. Thursday’s WASDE report upped projected corn production to 195 million bushels “based on increased planted and harvested areas from the June 28 Acreage report.” The projected yield is unchanged at 166 bushels per acre.
The report also dropped corn exports based on “current outstanding sales and shipments to date” and export inspection data hitting the lowest June figures since 2013.
Domestic soybean production took a slight hit in the WASDE, dropping 305 million bushels to 3.84 billion. U.S. exports of the crop also dropped 75 million to 1.87 billion “reflecting reduced supplies and increased competition from South American exporters.”
Newton said the prolonged trade war with China has left a great deal of uncertainty in soybean exports, and USDA’s projection could be tied to hopes that “China is going to come back to the table.”
In other commodities:
- Global wheat supplies were dropped 10.5 million tons due to production concerns in some major export countries such as Russia and Ukraine, along with the EU. Domestic production was bumped 18 million bushels (to 1.92 billion), with domestic use and U.S. exports also pegged for increases. USDA’s Crop Progress Report projects that, if realized, the 2019 production would result in a 9% jump in winter wheat over 2018 figures, but a 25% drop in durum wheat and 8% drop in spring wheat over the same time period.
- Rice supplies and production were both raised to the tune of 4.9 million hundredweight (cwt) and 10.6 million cwt, respectively. USDA said this increase was “partially offset” by a 5.7 million decrease in beginning stocks. Exports were also raised 2 million cwt.
- Global cotton production is up about 500,000 bales “largely due to increases in India’s crop.” U.S. export projections are dropped 250,000 bales “based on the pace of recent shipments.”
The next WASDE and Crop Production reports will be released Aug. 12.
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