USDA Monthly Report Comments
- USDA forecast corn production at 14,900 million bushels, based on an average yield of 178.5 bushels per acre.
- Corn harvested area was decreased by 500,000 acres.
- Corn carryout stocks were projected down 253 million bushels to 2,503 million bushels.
- Soybean production was forecast at 4,313 million bushels, based on an average yield of 51.9 bushels per acre.
- USDA lowered its projected ending stocks by 150 million bushels to 460 million bushels for soybeans.
- The projected soybean exports were unchanged at 2,125 million bushels despite the recent increase of purchases by China.
- There were no changes to the US wheat supply/demand balance sheet as expected.
- Forecasts for world ending stocks were lowered to 306.8 million tonnes for corn, and 93.6 million tonnes for soybeans.
FBN’s Take On What It Means: Corn and soy yields were lower as expected. Carryout stocks were also as expected. Unchanged soybean exports were a surprise to the market and many analysts forecast increases which would tighten stocks further. Overall FBN believes the USDA report was supportive for prices going into harvest.
Export Sales Remain Strong
- Soybean sales, in the first week of the 2020/21 marketing year, were strongly above market expectations at 116.2 million bushels.
- Export sales of soybeans to China totaled 59.1 million bushels in the latest reporting period.
- Corn sales, for the week ended September 3, were also strong at 71.8 million bushels.
- Weekly corn export sales to China were 44.76 million bushels.
- Wheat sales were solid at 17.8 million bushels, but were below average sales over the previous eight weeks.
- Upland cotton sales were 126,000 running bales, with China accounting for 79,100 of the total.
FBN’s Take On What It Means: With the large amount of sales already on the books for soybean, sales will need to average roughly 21 million bushels per week over the course of the 2020/21 marketing year in order for exports to reach the USDA's current projection 2.125 billion bushels, considerably below last year's 27.4 million bushels/week. Chinese purchases of US ag products will need to continue to offset coming harvest pressure.
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