This article was originally posted at 11:01 a.m. CDT. It was updated at 11:22 a.m.
OMAHA (DTN) -- As anticipated, USDA on Friday lowered corn production by 378 million bushels (mb) to 14.9 billion bushels (bb), dropping the national yield 3.3 bushels per acre (bpa) as well.
Farmers also will harvest 4.313 bb of soybeans in 2020 with a 51.9 bpa average yield. That's 112 mb lower than last month with a yield that's 1.4 bpa lower.
Friday's report was the first time this year USDA had access to field data when estimating the corn and soybean crops. This comes after both drought in the Western Corn Belt and a major windstorm hit Iowa and parts of Illinois in August, leading to significant crop losses in the eastern half of Iowa and parts of western Illinois.
According to DTN Lead Analyst Todd Hultman, Friday's new U.S. ending stocks estimates were neutral for corn, soybeans and wheat; world numbers were neutral for corn and soybeans, and bearish for wheat.
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-- Crop Production: https://www.nass.usda.gov/…
-- World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
Production was pegged at 14.9 bb, down 378 mb from the August forecast.
USDA also dropped corn yields to 178.5 mb, down 3.3 bpa from the August estimates. Harvested acres for corn also was lowered 500,000 acres from August to 83.5 million acres.
For crop demand, USDA increased corn exports for 2020-21 by 100 mb to 2.325 bb. Yet, USDA also lowered feed and residual use by 100 mbas well, and lowered ethanol demand 100 mb as well. So, USDA lowered overall total crop use for the 2020-21 crop by 100 mb for September to 14.675 bb.
Ending stocks were lowered for the 2020-21 crop by 253 mb to 2.503 bb. That put dropped the stocks-to-use ratio for corn to 17%, coming down from August ratio of 18.65%.
The average farm price for the 2020-21 corn crop was pegged at $3.50 a bushel, bumped up 40 cents from the estimated price in August.
Globally, USDA also lowered beginning stocks and production, but increased global demand and global exports. Collectively, that dropped the global ending stocks from 317.46 million metric tons in August down to 306.79 mmt for September.
American farmers will harvest 4.313 bb of soybeans in 2020 with a 51.9 bpa average yield. That's 112 mb lower than last month with a yield that's 1.4 bpa lower. USDA did not make revisions to harvested acreage in the wake of the Aug. 10 derecho.
The lower production estimate also resulted in a lower 2020-21 ending stocks estimate of 460 mb, down from 610 mb in USDA's August estimate. While beginning supplies dropped from last month, USDA made very few changes to demand, leaving crush and export estimates unchanged. USDA lowered residual use by 2 mb.
The national average farm gate price, at $9.25, is 90 cents higher than last month.
Globally, 2020-21 ending stocks came in at 93.59 million metric tons (mmt), down 1.77 mmt from last month. USDA sees production rising in Brazil, Canada and India and falling in Ukraine. It revised its forecast for Brazil's upcoming crop upwards by 2 mmt to 133 mmt, reflecting increased planting expectations. USDA said it updated Brazilian production for the 2013-14 to 2018-19 crop years to align with revisions by CONAB, Brazil's equivalent of USDA.
Worldwide old-crop (2019-20) supplies of soybeans were up slightly at 96.01 mmt. USDA left Brazil and Argentina production unchanged.
USDA left 2020-21 U.S. wheat production at 1.838 bb and average yield at 50.1 bpa.
New-crop U.S. wheat ending stocks were left at 925 mb. USDA also left domestic use and demand untouched from its August report. The farm-gate average price was unchanged from the August estimate at $4.50 per bushel.
Globally, old-crop (2019-20) wheat ending stocks are estimated at 299.78 million metric tons.
New-crop world ending stocks reached 319.37 mmt, an increase from the August estimate of 316.79 mmt. World consumption is increased 0.8 mmt to 750.9 million, primarily on higher feed and residual usage for Australia and Canada. Projected 2020-21 global trade is raised 1.5 million tons to 189.4 million on higher exports for Australia and Canada.
The largest import change for September is for China, where imports were raised 1.0 mmt to 7.0 mmt on an early strong pace of U.S. sales and shipments to China and increased exportable supplies from Australia and Canada.
USDA increased beef production by 20 million pounds, which increased third quarter beef production by 5 million pounds from last month's estimates. Fourth quarter 2020 beef production estimates posted the most significant support of 15 million pounds, focusing on increased overall beef supply running into the last few months of 2020. Production of beef for the first half of 2021 increased by 35 million pounds in the first quarter of the year, while increasing 85 million pounds for second quarter 2021. The increased production expectation in 2021 did little to change projected price levels but is likely to have bearish market indications on long term futures prices. Total beef demand increased through the end of 2020 from August reports, but beef demand was revised lower during 2021.
Annual pork production was revised lower in the September report with production falling 100 million pounds from the previous estimate. Annual 2021 pork production was also cut by 120 million pounds. This accounted for an estimated barrow price increase of $1.30 per cwt in the September report. Total use of pork was also adjusted lower by 120 million pounds from the August report for the remainder of 2020, while 2021 total use projections also were lowered by 120 million pounds. The report does not cover recent changes in export bans following the announcement of an African swine fever case in Germany. This could quickly change pork demand levels based on export markets through the end of the year.
Editor's Note: Join DTN Analyst Todd Hultman at 12 p.m. CDT on Friday, Sept. 11, for a look at what the day's numbers mean for grain prices. To register, visit: https://dtn.webex.com/…
|U.S. PRODUCTION (Million Bushels) 2020-21|
|U.S. AVERAGE YIELD (Bushels Per Acre) 2020-21 (WASDE)|
|U.S. ENDING STOCKS (Million Bushels) 2019-20|
|U.S. ENDING STOCKS (Million Bushels) 2020-21|
|WORLD ENDING STOCKS (Million metric tons) 2019-20|
|WORLD ENDING STOCKS (million metric tons) 2020-21|
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