USDA Reports Preview
USDA's First Reports From the Field Start Monday
All eyes will be on USDA's new corn and soybean yield estimates Monday, Sept. 12, the first World Agricultural Supply and Demand Estimates (WASDE) report of the year to include field-based observations. But that's not all -- USDA's NASS will also have an earlier-than-usual review of planting estimates for several crops, including corn and soybeans.
December corn is trading near its highest prices in two months, largely because many are expecting USDA to lower the corn yield estimate in Monday's Crop Production and WASDE reports, due out at 11 a.m. CDT.
The market first got wind of problems in this year's corn fields on Aug. 8 when DTN's Digital Yield Tour, powered by Gro Intelligence, estimated the national corn yield at 167.2 bushels per acre (bpa), much less than USDA's 177.0-bpa estimate at the time. Two and a half weeks later, Pro Farmer's crop tour followed with its own estimate of 168 bpa. On Sept. 8, Gro updated its yield estimate to 170.0 bpa, citing the influence of more moderate land-based temperatures (https://www.dtnpf.com/…).
Dow Jones surveyed 19 analysts and arrived at a 14.077-billion-bushel (bb) corn crop estimate, based on a yield of 172.4 bpa, down from USDA's August yield estimate of 175.4 bpa. There is a good chance many of those analysts think the corn yield will eventually be lower but expect USDA to be slow in arriving at that conclusion Monday.
We at DTN will also be watching for possible changes in corn and soybean planting estimates Monday. On Tuesday, Sept. 8, USDA's NASS announced it had enough data to update planting estimates for corn and soybeans on Sept. 12, one month earlier than usual. On Aug. 22, the Farm Service Agency reported 3.15 million acres of prevented plantings for corn and just under one million acres of prevented plantings for soybeans. It is difficult to predict how much those prevented acres will impact USDA's planting estimates Monday.
Dow Jones also expects USDA's estimate of U.S. ending corn stocks to drop from 1.388 bb in August to 1.180 bb in September, the lowest in 10 years, if true, and a strong argument for higher corn prices ahead. It will be interesting to see what changes USDA might have for corn demand as ethanol production slacked off at the end of 2021-22 and technical difficulties have put the public in the dark regarding export sales. The next weekly export sales report is expected to return Thursday, Sept. 15.
With a smaller U.S. corn crop anticipated, it is no surprise USDA's estimate of world ending corn stocks is also expected to tighten. Dow Jones' survey expects global ending stocks for 2022-23 to fall from 306.68 million metric tons (mmt) to 301.80 mmt (or 11.88 bb), down from 312.1 mmt (or 12.29 bb) the previous year. The more accurate assessment of world corn supplies excludes the outrageous 8.04 bb surplus estimate for China and came to 102.46 mmt or 4.034 bb in August, roughly an average amount over the past nine years.
Unlike corn, there is no popular bullish expectation for this year's soybean crop, but that doesn't mean USDA won't find a surprise when it includes the latest field-based observations in Monday's estimating process.
Dow Jones' survey expects USDA to estimate a record high soybean crop of 4.481 bb Monday, a small reduction from USDA's August estimate of 4.531 bb. The expected soybean yield of 51.5 bpa is slightly higher than a year ago, but down from USDA's August estimate of 51.9 bpa.
DTN's Digital Yield Tour stands alone with a more bullish view. Gro Intelligence updated its national soybean yield estimate from 48.9 bpa on Aug. 8 to 48.4 bpa on Sept. 8, noting its soybean yield estimate has remained stable throughout much of the season.
When it comes to U.S. ending soybean stocks in 2022-23, Dow Jones' survey does not expect much change, going with 240 million bushels (mb) Monday, down from 245 mb in August. USDA's demand changes will be interesting as crush incentives have remained generous and several new-crop soybean sales have been announced during the time weekly export sales data has not been publicly available.
USDA's estimate of world soybean stocks is not expected to show much change with Dow Jones looking for 101.1 mmt (or 3.71 bb), down from 101.41 mmt in August. Keep in mind the new soybean planting season for Brazil is set to start later this month.
December wheat prices have been stuck in a narrow, sideways trading range the past seven weeks and don't show much anticipation in either direction for Monday's reports. The fact is, the fundamental outlook is already bullish for wheat prices looking ahead to winter, but there hasn't been much buying interest yet, despite the outlook for tighter supplies.
According to Dow Jones, USDA may slightly increase its estimate of U.S. ending wheat stocks in 2022-23 from 610 mb to 622 mb. It is not clear what analysts have in mind for the slight increase and there are no new NASS production estimates in the September report, but anecdotal reports of the spring wheat harvest have sounded favorable.
International wheat crop estimates will get a lot of attention again Monday, but any changes are expected to be small. Dow Jones' survey expects USDA to slightly increase its estimate of world ending wheat stocks from 267.34 mmt to 267.6 mmt (or 9.83 bb). In the August report, world ending wheat stocks apart from China were estimated at 122.98 mmt (or 4.52 bb), the lowest in 15 years and a more practical assessment of available supplies.
Join us at 12:30 p.m. CDT Monday, Sept. 12, as we look at 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 point out 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 Monday's September WASDE report webinar: https://www.dtn.com/….
|U.S. PRODUCTION (million bushels) 2022-23|
|U.S. AVERAGE YIELD (Bushels Per Acre) 2022-23 (WASDE)|
|U.S. ENDING STOCKS (Million Bushels) 2021-22|
|U.S. ENDING STOCKS (Million Bushels) 2022-23|
|WORLD ENDING STOCKS (million metric tons) 2021-22|
|WORLD ENDING STOCKS (million metric tons) 2022-23|
Todd Hultman can be reached at firstname.lastname@example.org
Follow him on Twitter @ToddHultman1
(c) Copyright 2022 DTN, LLC. All rights reserved.