USDA Reports Preview
Quite the Production
Some of you who watched the NFL's Monday Night Football game this week (the Minnesota Vikings beat the Chicago Bears 20-17, if you're interested) were probably doing so just to see the premier of the trailer for the new Star Wars movie, "The Last Jedi." As one review of the trailer (yes, there is such a thing) put it, Mark Hamill had more screen time in this 2-minute trailer than he did in the entire 2-hour-plus previous movie. That movie, "The Force Awakens," was disappointing to some fans because, while it was quite the production, it didn't live up to its title by including the central character of Luke Skywalker.
Welcome to the world of agriculture and USDA's October round of Crop Production and Supply and Demand reports, which will be released at 11 a.m. CDT Thursday, Oct. 12. The one billed as highlighting actual acreage numbers from USDA's own Farm Service Agency (FSA).
However, all is not as it seems, and we need not go back any further than last year to see that fall acreage numbers, particularly planted, are not actually set in stone. In its 2016 edition of October reports, USDA pegged corn planted area at 94.5 million acres (ma). Again, this was billed as actual data from FSA and an increase from the guesswork that provided the previous September's estimate of 94.1 ma. The October soybean number written in stone rather than sand was 83.7 ma, oddly enough unchanged from the September estimate. However, and to the disappointment of USDA apologists, the agency's January "final" numbers showed something different, with planted area of 94.0 ma (corn) and 83.4 ma (soybeans). And, yes, harvested area changed as well, adding to the changes seen in production numbers from October to January.
Keep this in mind as you watch and hear all the hype -- and there will be plenty -- surrounding USDA's October report that the only number locked in for 2017-2018 will be beginning stocks, courtesy of the September Quarterly Stocks report.
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Since we aren't really adding many constants to the new-crop ending stocks equation, the focus instead will be on the continuing Keno game of crop production guessing. Again, we won't know actual planted acres; therefore, we won't know harvested acres, and we can't know real national average yield with harvest still in its early stages. All of these make up production, and all will remain unknown numbers. But the spotlight will shine nonetheless.
The average pre-report guess for corn production came in at 14.168 billion bushels for corn and 4.439 bb for soybeans versus USDA's September estimates of 14.184 bb and 4.431 bb, respectively. In other words, the guesses came in a little lower for corn and a little higher for soybeans. Nothing earth shattering. Nothing life changing. We'll see how markets react, if at all.
As for new-crop ending stocks, again I'll remind you that the only number in either the supply column or demand column that is written in pen rather than pencil is beginning stocks. To that, the new production numbers will be penciled (easy to erase and change) in along with an import estimate. Subtracted from that total will be the list of unknown demand numbers, including feed, crush, milled, seed, residual (my favorite) and exports. Playing with all these unknown numbers resulted in average pre-report guesses of 2.249 bb of corn, 453 million bushels of soybeans, and 946 mb of all U.S. wheat. USDA's September estimates were 2.335 bb, 475 bb and 933 bb respectively.
Anyone surprised by the likelihood of a decreased domestic soybean ending stocks number from USDA hasn't watched the previous productions over the years.
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Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT Thursday for a look at the latest USDA Supply and Demand and Crop Production estimates. Register now at: http://bit.ly/…
| U.S. CROP PRODUCTION (Million Bushels) 2017-2018 | ||||||
| Oct | Avg | High | Low | Sep | 2016-17 | |
| Corn | 14,168 | 14,329 | 13,836 | 14,184 | 15,148 | |
| Soybeans | 4,439 | 4,480 | 4,321 | 4,431 | 4,296 | |
| Grain Sorghum | 370 | 376 | 364 | 371 | 480 | |
| U.S. AVERAGE YIELD (Bushels Per Acre) 2017-2018 | ||||||
| Oct | Avg | High | Low | Sep | 2016-17 | |
| Corn | 169.7 | 171.2 | 167.0 | 169.9 | 174.6 | |
| Soybeans | 49.8 | 50.2 | 48.5 | 49.9 | 52.0 | |
| U.S. HARVESTED ACRES (Million Acres) 2017-2018 | ||||||
| Oct | Avg | High | Low | Sep | 2016-17 | |
| Corn | 83.5 | 84.0 | 82.9 | 83.5 | 86.7 | |
| Soybeans | 89.1 | 89.8 | 88.5 | 88.7 | 82.7 | |
| U.S. ENDING STOCKS (Million Bushels) 2017-2018 | ||||||
| Oct | Avg | High | Low | Sep | 2016-17* | |
| Corn | 2,249 | 2,450 | 1,985 | 2,335 | 2,295 | |
| Soybeans | 453 | 503 | 375 | 475 | 301 | |
| Grain Sorghum | 35 | 39 | 31 | 29 | 34 | |
| Wheat | 946 | 971 | 928 | 933 | 1,184 | |
| *Corn, soybeans, grain sorghum USDA's Sep 29 Quarterly Stocks | ||||||
| WORLD ENDING STOCKS (Million Metric Tons) 2017-2018 | ||||||
| Oct | Avg | High | Low | Sep | 2016-17 | |
| Corn | 201.5 | 204.0 | 196.7 | 202.5 | 227.0 | |
| Soybeans | 96.5 | 98.0 | 93.9 | 97.5 | 96.0 | |
| Wheat | 262.9 | 265.4 | 258.0 | 263.1 | 255.8 | |
Darin Newsom can be reached at darin.newsom@dtn.com
Follow him on Twitter @DarinNewsom
(AG/CZ/SK)
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