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August 10, 2020 | FBN Insights | Kevin McNew

Markets Anticipating USDA Report Midweek

Corn and soybean crop forecasts will not include usual field-survey based input, like plant population, ear counts, etc.

USDA Report Due Wednesday, August 12 

  • The USDA’s forecast of corn and soybean crops will not include their usual field-survey based input, like plant population, ear counts, etc.
  • The agency’s crop projections in the August report will be based only on farmer survey data and satellite data analysis.
  • The average expectation for corn production is 15,182 million bushels on a yield of 180.4 bushels per acre.
  • Corn ending stocks for 2020/21 are expected on average to grow to 2,813 million bushels from 2,268 million last year.
  • Soybean production is estimated at 4,263 million bushels with a yield of 51.3 bushels per acre.
  • 2020/21 soybean ending stocks are expected to be 517 million bushels, below 617 million expected for last year.
  • The average of analysts’ estimates for total wheat production is at 1,832 million bushels, down from 1,920 million in 2019/20.

FBN’s Take On What It Means: The market is expecting large yields and production in Wednesday’s report, but will have to wait until September for the inclusion of actual field observations.  The demand side of the balance sheet is also a contention and it remains to be seen how USDA reacts to the recent, significant Chinese purchases of corn and soybeans, and whether the export forecasts are raised. 

 

 

U.S. Weather Remains Mostly Favorable 

  • Rainfall over the weekend was mostly concentrated in Missouri and from the northern Plains into the northern Great Lakes region.
  • Most other areas in the Midwest saw seasonable warm temperatures and experienced net drying.
  • The driest areas continued in portions of Iowa, northeastern Nebraska southeastern South Dakota and far southwestern Minnesota.
  • Another area of dryness and concern for crops was in the northern Delta and areas east into northern Alabama and far southern Tennessee.
  • The forecast through August 19 suggests that rain will fall in most areas of the Midwest, Great Plains, Delta and southeastern states. 
  • The national forecast does not project any extreme temperatures over the Corn Belt through mid-month.

FBN’s Take On What It Means: The 10-day forecast is still offering at least some rain for nearly all key U.S. crop areas leaving some dry pockets, but supporting a mostly favorable production outlook. Areas in Iowa, the northwestern Plains and neighboring areas will continue to deal with moisture shortages that will keep the pressure on for late season crop development. At least some rain is expected in both of these drier areas that may offer temporary relief. The potential for record yields for corn and soybeans will likely remain a drag on prices. 

 

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