The Department of Agriculture said it's expecting smaller harvests of corn, soybeans and other crops this year based on producer surveys compiled in a monthly report falling largely in line with trader expectations.
USDA’s World Agriculture Supply and Demand Estimates report slashed corn production by 209 million bushels and cut soybean harvest by 95 million bushels on lower yields reported from the surveys. Rice production was forecast higher, but wheat, cotton and sugar forecasts were also trimmed.
Traders had eyed the August WASDE and Crop Production reports as key releases to determine market movement based on the producer survey information and to assess the impacts of drought in many important growing regions.
But the reaction was more muted. Prompted in an interview for a succinct one-word description of the report, U.S. Commodities broker and analyst Dax Wedemeyer opted for the term “snoozer.”
“It’s probably considered neutral,” he said of the report. “It wouldn’t surprise me to see the trade try to rally just because coming into this report, we had already discounted much of it and we’ve been on pretty good breaks, and the market technically is overbought.”
Producer survey data led USDA to project a corn yield of 175.1 bushels per acre, a 2.4-bushel drop from its July projection. For soybeans, USDA offered a 50.9 bpa yield projection, a 1.1-bushel drop from July but up 2.8 bushels per acre from last year. Wedemeyer said traders were estimating a 175.5 bpa corn yield and 51.3 bpa soybean figure, putting USDA’s numbers slightly below expectations.
Don't miss a beat sign up for a FREE month of Agri-Pulse news! The latest on what’s happening in Washington, D.C. and around the country in agriculture, just click here.
The 15.1-billion-bushel corn crop, while smaller than USDA’s July forecast, is still estimated to be 10% larger than the 2022 harvest and would be the second largest on record; only the 2016-2017 crop year would be larger. USDA also cut domestic use and exports due to the smaller crop; ending stocks were lowered 60 million bushels to 2.2 billion and the season-average price was raised one dime to $4.90 per bushel.
The soybean crop was trimmed to 4.2 billion bushels. Ending stocks were dropped to 245 million bushels, a 55-million-bushel reduction from July’s forecast, as USDA cut exports 25 million bushels due to lower domestic supplies but unchanged U.S. crushing numbers. The dynamics raised the season-average price 30 cents to $12.70 per bushel.
Wedemeyer also noted trader uncertainty about a wave of hefty rainfalls that hit various parts of the western Corn Belt in the last week, many of which could improve crops in a way that might not be accounted for in the early-August survey data.
“Late rains were probably stabilizing for corn,” but “as they say, August is the month for beans,” he noted.
USDA’s next set of WASDE and Crop Production reports will be released Sept. 12.
For more news, go to www.Agri-Pulse.com.
