USDA Reports Preview

By Darin Newsom
DTN Senior Analyst

USDA's September Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports usually don't get much attention. Sure, media types flock to the lock-up like always and analysts drool at the prospect of having another set of estimates to analyze, but generally speaking, grain and oilseeds markets don't get all that excited.

That could change this year after USDA's initial survey-based guesses in August came in well above all the analysts' pre-report guesses. As one would expect, grain and oilseed markets hit the skids with Dec corn losing 45 cents (12% of its value), November soybeans falling 67 1/2 cents (7%), and December Chicago wheat dropping 67 cents (14%).

All because of how one set of guesses related to another set of guesses.

USDA will release its latest Crop Production and WASDE reports at 11 a.m. CDT Tuesday, Sept. 12.

Heading into the September round of reports, it looks to be the same game of whose guesses get closest to USDA's. The numbers themselves are irrelevant, because nothing more is actually known about the 2017 crop than it was back in August. The earliest-planted acres -- and therefore harvested acres -- could be finalized by using FSA's numbers in October. But, normally, "final" numbers aren't published until January. National average yield remains anyone's guess, again until UDSA publishes what's supposed to be its final tally in January. So without actual harvested acres or real yield data, final production is -- well -- just another guess.

As the old infomercials scream, "But wait, there's more!"

We also won't know beginning stocks for either corn or soybeans, given that the final, data-based number isn't available until the release of the Sept. 29 Quarterly Stocks report. So, no total production, no beginning stocks, and really no idea other than a rough average of expected imports to calculate total supplies.

But the numbers will be released, and markets will move anyway.

What are the pre-report numbers you ask? For what they're worth, the average estimate for corn production came in at a nice, round 14 billion bushels (convenient, right?). This is down slightly from USDA's August guess of 14.153 bb. National average corn yield is expected to come in at 167.8 bushels per acre, also below USDA's August dart-in-the-dark estimate of 169.5 bpa. But here's where it really gets fun, because to get an ending stocks figure, you have to subtract one set of guesses (total demand) from another set of guesses (total supplies) with a range of estimates running from 2.323 bb to 1.898 bb (a range of 425 million bushels). Somehow, the average pre-report figure comes in at 2.133 bb.

It's the same game in soybeans. The average pre-report total production guess came in at 4.321 bb as compared to USDA's August release of 4.381 bb. National average yield turned up at 48.7 bpa, also down slightly from USDA's August pencil mark of 49.4 bpa. Again using the fuzziest math possible, ending stocks are expected to be 437 mb as compared to the August number of 475 mb. But take note of the range from 540 mb to 325 mb -- a range of 115 mb. This is more than 25% of what the average guess turned out to be (437 mb). Analysts are going to make it more difficult for USDA to come in outside the range in September, that's for sure. They aren't going to be made the fool again, right?

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Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT Tuesday as he takes a look at the latest USDA Supply and Demand and Crop Production estimates and what they might mean for the markets. To register, visit http://www.dtn.com/…

U.S. CROP PRODUCTION (Million Bushels) 2017-18
	Sept	Avg	High	Low	Aug	2016-17
Corn		14,000	14,195	13,821	14,153	15,148
Soybeans		4,321	4,417	4,179	4,381	4,307
Grain Sorghum		365	376	355	369	480
U.S. AVERAGE YIELD (Bushels Per Acre) 2017-18
	Sept	Avg	High	Low	Aug	2016-17
Corn		167.8	170.0	165.5	169.5	174.6
Soybeans		48.7	49.8	47.1	49.4	52.1
U.S. ENDING STOCKS (Million Bushels) 2017-18
	Sept	Avg	High	Low	Aug
Corn		2,133	2,323	1,898	2,273
Soybeans		437	540	325	475
Grain Sorghum		51	56	45	52
Wheat		920	943	875	933
U.S. ENDING STOCKS (Million Bushels) 2016-17
	Sept	Avg	High	Low	Aug	2015-16
Corn		2,351	2,374	2,300	2,370	1,737
Soybeans		364	390	331	370	197
WORLD ENDING STOCKS (Million Bushels) 2017-18
	Sept	Avg	High	Low	Aug
Corn		198.2	203.0	189.4	200.9
Soybeans		97.3	100.0	95.0	97.8
Wheat		263.9	268.0	258.0	264.7
WORLD ENDING STOCKS (Million Bushels) 2016-17
	Sept	Avg	High	Low	Aug	2015-16
Corn		227.9	229.0	225.1	228.6	213.5
Soybeans		96.8	98.0	95.5	97.0	77.1
Wheat		258.5	259.0	257.5	258.6	242.9

Darin Newsom can be reached at darin.newsom@dtn.com

Follow Darin Newsom on Twitter @DarinNewsom

(AG/GH)

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