RFS Update and US Crop Production Numbers - Tuesday, 10 November 2015

The November USDA Supply and Demand report has been released and the worksheet is listed below:

U.S. Crop Production

 

November Est.

Avg. Guess

Trade Range

USDA October

2014

Corn

 

 

 

 

 

Production

13.654

13.579

13.435 - 13.718

13.555

14.216

Yield

169.3

168.4

166.6 - 170.1

168.0

171.0

Harvested Acres

80.7

80.663

80.500 - 80.700

80.664

83.136

Soybeans

 

 

 

 

 

Production

3.981

3.915

3.895 - 3.955

3.888

3.927

Yield

48.3

47.5

47.3 - 48.0

47.2

47.5

Harvested Acres

82.4

82.379

82.200 - 82.430

82.429

82.591

2015/16 U.S. Ending Stocks

 

November Est.

Avg. Guess

Trade Range

USDA October

Corn

1.760

1.597

1.461 - 1.702

1.561

Soybeans

0.465

0.436

0.375 - 0.474

0.425

Wheat

0.911

0.877

0.836 - 0.914

0.861

2015/16 World Ending Stocks

 

November Est.

Avg. Guess

Trade Range

USDA October

Corn

211.91

188.43

184.85 - 190.76

187.83

Soybeans

82.86

85.32

83.64 - 86.70

85.14

Wheat

227.3

227.82

225.50 - 230.00

228.49

 

Bearish report for corn as expected.  The national corn yield was raised by almost 1 bushel which brings the average to 169.3 bushels per acre.  Some of the other important highlights:

  • Exports down by 50 million bushels.
  • Ethanol lowered by 75 million bushels.
  • Demand was lowered, while ending stock numbers were increased by almost 200 million bushels.
  • China’s beginning stocks number was raised by 18.8 million tons on lowered feed use for the previous marketing years.
  • Feed usage raised by 25 million bushels.
  • European Union corn was reduced from 58 MMT to 57.75 MMT
  • Ukraine corn was also reduced to 23 MMT from 25 MMT

 

Bearish report found for soybeans as well.  Production for soybeans hit an all-time record of 48.3 bushels per acre up from 47.2 bushels per acre; this is a 90 million bushel increase in yield.  Other highlights:

  • Ending stocks raised by 40 million bushels which brings the total to 465 million bushels.
  • Global stock inventories were lowered to 2.2 MMT
  • Soybean crush was raised by 10 million bushels.
  • Exports were increased by 40 million bushels.
  • Production from Argentina, Brazil and China remained unchanged.

 

The next USDA Supply and Demand Report will be released on December 9th, 2015. 

Now that the November report has been announced the trade will likely return to its day to day monitoring of key factors for price movements.  Export news will likely be a very important component of this as will weather in South America.  We have been hearing reports of dry conditions in Brazil but the southern portion of Brazil is dealing with too much precipitation which may be a factor for wheat quality.  There is concern that the excessive moisture has damaged the quality of the wheat to a point it may only be useful for use in feed.

                                 

 

We haven’t heard much from the Environmental Protection Agency regarding their proposed rule change in 2013 to decrease production levels of ethanol that were originally mandated by the U.S. Congress in 2007.  According to the original mandate we were required to produce:

  • 14.4 billion gallons in 2014
  • 15 billion gallons in 2015
  • 15 billion gallons in 2016

On May 29th the EPA increased their original proposed levels from 2013 to:

  • 13.25 billion gallons in 2014
  • 13.40 billion gallons in 2015
  • 14 billion gallons in 2016

The White House Office of Management and Budget received the final proposal from the EPA on the RFS rule change.  According to the American Soybean Association, the proposal is in the final review stages and the Administration is expected to approve the change by the end of the month.

According to The Weather Channel the Plains, Midwest and mid-South regions are under the threat of a severe weather outbreak beginning tomorrow.  They expect a strong southerly dip in the jet stream to move out the desert southwest on Tuesday and move eastward.  There is a threat for tornadoes to develop but severe thunderstorms, wind and large hail appear to be likely.  The article also stated that “We expect the area of coverage and number of severe weather reports to be far greater than we saw last week.”

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