Rich Nelson at Allendale says No Big Surprises for the August WASDE ReportWed, 12 Aug 2020 15:58:06 CDT
U.S. farmers are expected to harvest a lot of corn and soybeans this year. The August World Ag Supply and Demand Estimates report says corn production is forecast at a record-high of 15.3 billion bushels, up 278 million from last month. The season's first survey-based corn yield forecast is at a record 181.8 bushels per acre, up 3.3 bushels from last month's trend-based projection. Corn ending stocks rose more than 100 million bushels to 2.76 billion.
Associate Farm Director, KC Sheperd spoke with Rich Nelson, Chief Strategist at Allendale and he said he didn't see many big surprises, "In terms of viewpoint, at that time we had great crops, record yields for corn and soybeans, we agree with. Obviously right now the market is suggesting we wait for September, when USDA does proper infield analysis, and maybe we will see some changes at that time."
Nelson said even though we have seen some crazy weather, that weather didn't play a part in this particular report, "It didn't have any factor at all. This survey was done at a very specific time frame. This report is taken as of August 1 and it didn't include any act of severe weather, so we will will have to wait for the September report to see a true impact discussion."
Nelson said as far as the trade estimates go, we were a little bit over on both corn and soybeans.
The season-average corn price dropped 25 cents to $3.10 a bushel. The soybean production forecast is 4.42 billion bushels, up 290 million bushels on expected higher yields. The yield forecast is at a record 53.3 bushels per acre, up 3.5 bushels from last month. Soybean ending stocks rose 185 million bushels higher from last month to 610 million bushels in the August report. The season-average soybean price is forecast at $8.35 a bushel, 15 cents lower than in July. U.S. wheat production jumped 14 million bushels to 1.84 billion. Wheat ending stocks dropped by 17 million bushels to 925 million, and if realized, that would be the lowest ending stocks in six years. The U.S. season-average farm price dropped by a dime to $4.50 a bushel. The first cotton production forecast of the year is 18.1 million bales, nine percent lower than last year. Yield is expected to be a record high of 928 pounds per acre.
Nelson said a few things to watch for in the September report is that USDA still has a large corn-for-ethanol estimate plugged in, "In fact, their number implies only a 5% cut for the whole coming new crop year versus a normal rate. Keep in mind our most recent production rates on ethanol are running 10-12% under last year, so we could make some arguments on the production side, for the bullish side, but keep in mind, USDA is not quite right with their demand numbers here just yet."
To see the complete numbers from the August WASDE, click here:
To hear KC's complete conversation with Rich Nelson at Allendale, click or tap below.
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