USDA Reports Preview

This year's late-planted corn and soybean crops still have a way to go, but that won't keep USDA and all of us from straining, trying to estimate yields that are still at risk. The Friday, Aug. 12, World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports from USDA will not only try to refine USDA's harvest predictions but may also have something to say about this year's plantings.

CORN

December corn prices have held roughly steady the past month, while USDA's good-to-excellent rating for the corn crop has fallen from 64% to 58% with signs of stress from high temperatures and drier conditions in the southern and Western Corn Belt. Heading into Friday's WASDE and Crop Production reports, set for 11 a.m. CDT, USDA has kept its yield estimate for corn at a record-high 177.0 bushels per acre (bpa), but weather conditions and USDA's own crop ratings are arguing for a modest reduction.

Dow Jones' survey of 20 analysts, as dangerous a group of hombres as there ever was, expects USDA to lower its U.S. corn crop estimate for 2022 from 14.505 billion bushels (bb) to 14.383 bb, based on a lower yield of 175.8 bpa. That is not as low as the 167.2 bpa yield estimated by DTN's Digital Yield Tour this week, a collaborative effort with Gro Intelligence (https://spotlights.dtnpf.com/…). Keep in mind, however, USDA will not assess field data until its September WASDE report, an important addition that could come with significant surprises.

USDA's ending stocks estimate for U.S. new-crop corn is expected to drop from 1.470 bb to 1.383 bb, staying well below the heavier days of corn supply witnessed from 2014 to early 2020. For the most part, corn demand has performed close to recent USDA expectations, and any changes in Friday's demand estimates are apt to be small.

USDA's estimate of world ending new-crop corn stocks is expected to fall from 312.9 million metric tons (mmt) to 309.8 mmt (or 12.20 bb), the result of the lower U.S. crop estimate. USDA's old-crop corn production estimates for Brazil and Argentina will probably stay close to July's 116.0 mmt and 53.0 mmt, respectively. Brazil's crop agency, Conab, will have its own estimates out Thursday morning. The strange thing about USDA's world corn estimates continues to be its stubborn insistence China has over 8 bb of surplus corn, a bizarre assessment for a country where corn goes for the equivalent of $10.22 per bushel. Overall, I don't expect corn prices to be surprised by USDA's estimates until the Sept. 12 WASDE report.

SOYBEANS

Before we get to Friday's report, I have to mention that demand for physical soybeans is currently so strong that August soybeans have not had any deliveries as of Wednesday, Aug. 10. On Tuesday, the August contract closed up 73 3/4 cents at a new closing high of $16.93 1/4. Either the remaining holders of available soybeans are extremely disciplined in holding back or old-crop soybean supplies just aren't there. Time will tell which is the case.

Dow Jones' survey of analysts expects USDA to lower its estimate of the 2022 U.S. soybean crop from 4.505 bb to 4.471 bb, a slight reduction based on a slightly lower yield of 51.0 bpa. Again, that is not as low as the Digital Yield Tour's 48.9 bpa estimate, but it is a reasonable guess for USDA's next move on Friday.

USDA's estimate of U.S. new-crop ending soybean stocks is expected to slip from 230 million bushels (mb) to 227 mb, hardly worth mentioning. The shipment pace of old-crop soybeans will probably not reach USDA's estimate of 2.170 bb of exports, but crush incentives remain promising for both old- and new-crop seasons.

Dow Jones' survey expects only a slight reduction in USDA's estimate of world soybean stocks, from 99.6 mmt to 99.2 mmt (or 3.64 bb). Actual ending stocks in each country's local season are much tighter with USDA expecting Brazil to end its season on Jan. 31, 2023, with a scant 87 mb of soybeans.

Moving forward into the new season, it is difficult to know yet if U.S. soybean supplies will be outrageously tight or comfortably available. Much will be determined by the findings of USDA's objective field data in September. Especially after this year's late plantings and numerous re-plantings, it is too early to put too much significance in Friday's soybean yield estimates.

WHEAT

If Dow Jones' survey is correct, USDA will increase its estimate of U.S. wheat production by 11 mb to 1.792 bb and increase its estimate of U.S. ending wheat stocks in 2022-23 by 12 mb to 651 mb. If true, that would be similar to a year ago and also the lowest ending stocks in nine years, a strong reason for wheat prices to find support now that the speculative crowd has been largely washed out and prices have fallen over $5 from their highs in May.

Friday's reaction to USDA's new U.S. numbers is likely to be muted, but there could be plenty of excitement for wheat traders to find in USDA's world numbers. Dow Jones expects USDA's world ending wheat stocks to slightly increase from 267.5 mmt to 267.8 mmt (or 9.84 bb), but it is in the details where surprises could be lurking.

The first suspect is the estimate for Russia's wheat production where USDA is settled on a record-high 81.5 mmt (2.99 bb), but private estimates are saying should be 90 mmt or higher. USDA's 134.1 mmt (4.93 bb) estimate for Europe is a candidate for a lower estimate after contending with hot and dry conditions much of this year. Canada's crops are doing well overall but have areas in the southwestern part of the Prairies that need more rain.

CONCLUSION

Other items to watch for the three crops above are possible changes in USDA's estimates of planted or harvested acres. As promised after the June Acreage report, National Agricultural Statistics Service (NASS) conducted a second survey of planted acres for corn, soybeans, spring wheat and other crops in the Dakotas and Minnesota in July. If the new data justifies revisions, NASS will publish the new numbers in Friday's Crop Production report, and they will also be included in the WASDE report.

Acreage estimates in Friday's WASDE report will also reflect data from the Farm Service Agency's first estimate of prevented plantings -- numbers that will also be posted separately on the Farm Service Agency website one hour after the WASDE report is released.

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Join us at 12:30 p.m. CDT Friday, Aug. 12, as we sort through USDA's new estimates and discuss what they mean for crop prices. We'll talk about which estimates are reasonable, which are not and will also mention the market's own clues. For those busy at 12:30 p.m., there will be a link provided to replay the webinar at your convenience. Register here for Friday's August WASDE report webinar: https://www.dtn.com/….

U.S. PRODUCTION (million bushels) 2022-23
	Aug	Avg	High	Low	Jul	2021-22
Corn		14,383	14,553	14,192	14,505	15,115
Soybeans		4,471	4,546	4,367	4,505	4,435
All Wheat		1,792	1,825	1,780	1,781	1,646
Winter		1,204	1,220	1,197	1,201	1,277
HRW		585	593	580	585	749
SRW		377	385	372	376	361
White		242	250	239	240	167
U.S. AVERAGE YIELD (Bushels Per Acre) 2022-23 (WASDE)
	Aug	Avg	High	Low	Jul	2021-22
Corn		175.8	177.6	173.2	177.0	177.0
Soybeans		51.0	52.0	49.9	51.5	51.4
U.S. ENDING STOCKS (Million Bushels) 2021-22
	Aug	Avg	High	Low	Jul
Corn		1,518	1,586	1,465	1,510
Soybeans		228	267	210	215
Wheat		660	660	655	660
U.S. ENDING STOCKS (Million Bushels) 2022-23
	Aug	Avg	High	Low	Jul
Corn		1,383	1,470	1,285	1,470
Soybeans		227	289	151	230
Wheat		651	684	607	639
WORLD ENDING STOCKS (million metric tons) 2021-22
	Aug	Avg	High	Low	Jul
Corn		313.3	323.0	311.6	312.3
Soybeans		88.9	90.0	87.7	88.7
Wheat		280.1	281.4	278.0	280.1
WORLD ENDING STOCKS (million metric tons) 2022-23
	Aug	Avg	High	Low	Jul
Corn		309.8	313.2	305.0	312.9
Soybeans		99.2	100.4	97.5	99.6
Wheat		267.8	273.0	265.0	267.5

Todd Hultman can be reached at todd.hultman@dtn.com

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