USDA Report Data and Lower Odds For La Niña - Wednesday, 14 September 2016

Crop prices have fallen off dramatically since the end of June and because of this many producers have held on to on-farm stored grain in hopes of another rally but record setting yield expectations have continued to push prices even lower.  To add to the negative situation the trade is now questioning whether or not the USDA has accurate acres numbers for corn and soybeans after reviewing data from the FSA.  Historically the numbers from the FSA and USDA have differed but traders are now questioning the extent of this difference and are estimating that an increase of 2 million acres for both corn and soybeans is possible.  There seems to be very little good news on the horizon, as producers we need to watch the yield data that is now starting to be reported and also keep an eye on South America’s weather which so far has been favorable for producers in those areas.

The September USDA Supply and Demand was released on Monday, results are listed:

USDA Supply and Demand September 12, 2016 Worksheets

U.S. Production

 

Sep. #

Avg. Guess

Trade Range

USDA August

Corn Production

15.093

15.027

14.757 - 15.300

15.153

Corn Yield

174.4

173.4

171.0 - 175.6

175.1

Soybean Production

4.201

4.089

4.019 - 4.162

4.060

Soybean Yield

50.6

49.2

48.1 - 50.1

48.9

U.S. Ending Stocks 2015/16

 

Sep. #

Avg. Guess

Trade Range

USDA August

Corn

1.716

1.711 

1.680 - 1.775 

1.706

Soybeans

0.195

0.232

0.200 - 0.275

0.255

U.S. Ending Stocks 2016/17

 

Sep. #

Avg. Guess

Trade Range

USDA August

Corn

2.384

2.329

2.055 - 2.690

2.409

Soybeans

0.365

0.330

0.245 - 0.440

0.330

Wheat

1.100 

1.103

1.000 - 1.200

1.100

World Ending Stocks 2015/16

 

Sep. #

Avg. Guess

Trade Range

USDA August

Corn

209.3

208.75

206.90 - 210.50

209.34

Soybeans

72.9

72.27

70.70 - 73.12

73.00

         

World Ending Stocks 2016/17

 

Sep. #

Avg. Guess

Trade Range

USDA August

Corn

219.5

219.35

211.50 - 228.65

220.81

Soybeans

72.2

70.37

65.13 - 72.50

71.24

Wheat

249.1

251.34

246.30 - 255.00

252.82

 

A few of the notable points:

CORN

  • Overall global corn production was decreased by -2.8 million tons but still remains over 2014/2015 record levels.
  • U.S. corn yield was dropped from 175.1 to 174.4 bushels per acre with total production reduced by -61 million bushels but this still leaves production at over 15 billion bushels.
  • Old crop exports were cut -10 million bushels.
  • New crop corn exports were unchanged.
  • Feed and residual usage were reduced by -25 million bushels for the new crop.
  • Ending stocks were lowered but still remain at their highest point in nearly 30 years.
  • Chinese import expectations for corn were raised from 1.0 to 3.0 MMT’s.

SOYBEANS

  • The production expectation for U.S. production was raised to an average of 50.6 bushels per acre.
  • Demand for old-crop soybeans was increased by +60 million bushels.
  • Domestic soybean crush was increased by +10 million bushels.
  • New crop soybeans ending stocks were raised by +35 million bushels.
  • China’s crop is also expected to increase from 12.2 to 12.5 MMT.
  • Chinese imports were lowered by 1 MMT from 87.0 to 86.0.

The next USDA Supply and Demand data will be available on Wednesday, October 12th, 2016.

The La Niña weather pattern that we have been told to expect this fall/winter is now looking like it will no longer develop.  NOAA reports that there is only a 40% chance remaining for its development, this is a significant reduction from predictions last spring.  The cool Pacific water required for the development of the system is not expected to remain in place and sea-surface temp readings have been trending back to near average or ENSO (neutral conditions).  This does not mean that there is no chance for the development of La Niña to occur, other factors like blocking also largely influence weather patterns.  If these neutral conditions or ENSO readings continue we can expect winter temperatures that are colder than normal from Canada into the Upper Midwest and Northeast with higher than normal odds of above normal temps in the South. As shown in the map provided.

 

Fall temps have arrived this week but aren’t expected to last as the 6 to 10 day forecast for September 17th-21st calls for at to above normal temps for the majority of the nation.  The map below shows us the 5 day rainfall amounts forecasted for the U.S. from yesterday through this Sunday, September 18th.

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