Allendale's Rich Nelson says USDA Raises Corn and Soybean Yields on September WASDE ReportFri, 10 Sep 2021 14:40:23 CDT
USDA on Friday released its September Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.
USDA on Friday raised its corn yield estimate by 1.7 bushels to 176.3 bushels per acre (bpa), pushing estimated production to 14.99 billion bushels (bb) for the 2021-22 crop. USDA lowered soybean acreage estimates but increased yield forecasts, resulting in slightly higher production. Acreage dropped to 87.2 million from 87.6 million in August, while yield climbed 0.6 bpa to 50.6 bpa during the same timeframe.
Associate Farm Director KC Sheperd spoke to Allendales Rich Nelson, and he said Friday's new U.S. ending stocks estimates were pretty neutral for corn and neutral for soybeans, "Most people would call this a neutral report for Corn and soybeans, and not as bad as it could have been."
Nelson said for Crop Production in corn the production changes with the old crop added over 300 million bushels to total supply, "On Soybeans we did see an increase, but not as bad as it could have been."
As for Cotton crop production we did see an increase, Nelson said that is the largest production we have seen in the past two years, "Production was a little bigger than a lot of people expected, stock numbers going from 3.0 to 3.7 million bales, Some people might call that just a little disappointing."
You can also access the full reports here:
-- Crop Production:
-- World Agricultural Supply and Demand Estimates (WASDE):
USDA increased the yield estimate for corn by 1.7 bpa to 176.3 bpa. Along with that, USDA also slightly raised planted and harvested acres, increasing planted acres 600,000 acres to 93.3 million acres (ma). That bumps up estimated harvested acres as well to 85.1 ma.
The higher yield comes in just below the 2017 record yield of 176.6 bpa.
The moves on yield and acreage increase corn production for the new crop year, 2021-22, to 14.99 bb, up 246 ma from the August report.
USDA pegs ending stocks for 2021-22 at 1.408 bb. Looking at demand, USDA, raised feed and residual use 75 mb to 5.7 bb. Exports were also raised 75 mb to 2.4 bb as well. USDA also increased the old-crop ending stocks by 70 mb, bumping it to 1.187 bb compared to the August estimate of 1.117 bb. USDA lowered old-crop food, seed and industrial use and ethanol use to bring down the total use for the old crop.
The changes in the September numbers lowered the national average farm gate price by 30 cents to $5.45 per bushel. That comes after USDA had raised the average price 15 cents a bushel in the August report.
Globally, USDA forecasts the 2021-22 world ending stocks at 297.63 million metric tons (mmt), an increase of 13 mmt from the August forecast. USDA raised global estimated production 11.65 mmt to 1,197.77 mmt.
For old-crop corn, world ending stocks came in at 286.48 mmt, up 5.73 mmt from August. The Brazilian production forecast -- still looking at the old crop from 2020-21 -- was lowered 1 mmt to 86 mmt. Argentina's production was increased 1.5 mmt to 50 mmt.
USDA tweaked both acreage and yield estimates for soybeans. Planted acreage declined to 87.2 million from 87.6 in August, while yield climbed 0.6 bpa to 50.6 bpa during the same timeframe.
The result was a 35 mb increase in forecast production to 4.374 bb. USDA boosted beginning stocks, which are also ending stocks from the 2020-21 marketing year, by 15 mb to 175 mb. It lowered its import forecast by 10 mb, resulting in total supply of 4.574 bb.
On demand, USDA reduced its crush forecast by 25 mb while boosting exports by 35 mb. It also sees 10 mb higher total use. The result is that ending stocks for 2021-22 increased to 185 mb, a 30 mb increase from last month that's in line with pre-report estimates.
The national average farm gate price dropped by 80 cents from the August report to $12.90 per bushel.
For old-crop (2020-21) ending stocks, USDA anticipates finding 15 mb more on hand, due to a reduction in crush.
Globally, USDA sees higher ending stocks of 98.89 mmt in the 2021-22 crop year, with USDA saying that higher beginning stocks for China and higher U.S. ending stocks account for most of the 2.7 mmt increase.
USDA left 2020-21 production for Brazil and Argentina unchanged at 137 mt and 46 mmt, respectively. For the upcoming crop season, USDA forecasts Brazilian production at 144 mmt and Argentine production at 52 mmt.
USDA left U.S. wheat production untouched, with planted acres still sitting at 46.7 million and average yield at 44.5 bpa.
USDA still sees tight wheat ending stocks, trimming them to 615 mb, down from 627 mb in August. USDA knocked wheat imports down 10 mb, while increasing food use by 2 mb, resulting in the tighter ending stocks situation. The agency trimmed U.S. farm gate prices by 10 cents to $6.60 per bushel.
Globally, USDA increased wheat world ending stocks up more than 4 mmt, to 283.22 mmt. Global production was up overall, with USDA bumping up Australia production 1.5 mmt to 31.5 mmt, as well as boosting European Union's production up slightly to 139 mmt. This more than offset a slight drop in Canadian production, down 1 mmt to 23 mmt, while Russian production stayed flat 72.5 mmt.
Annual beef and pork production continue to be reduced in the September WASDE report with beef production listed at 27.74 billion pounds, down 130 million pounds from the August estimate. Pork production was reduced 85 million pounds, with estimated annual production listed at 27.73 billion pounds. These reductions in beef production were carried into 2022 projections with beef production next year expected at 26.87 billion pounds, falling 90 million pounds from the August estimate. Beef production in the fourth quarter of 2021 is expected to be reduced by 50 million pounds from current third quarter estimates.
The significant production losses expected in both the first and second quarter of 2022 is likely to keep supplies generally tight. Pork production in 2022 is expected to total 28.14 billion pounds, unchanged from last month's estimate. Pork production in the fourth quarter of 2021 expects to remain strong, but this has generally already been priced into the market. Pork production in the fourth quarter is listed at 730 million pounds over third quarter levels, with this production surge still being felt in first quarter 2022 production levels.
Moderate adjustments were made to steer and barrow and gilt prices, with steer prices increasing $1 per cwt in the September report over the previous month, with annualized prices of $122.20 per cwt, shifting the fourth quarter 2021 price to $131 per cwt. Barrow and gilt prices are expected to see a $0.20 per cwt gain from last month's projection with annualized prices of $69.90 per cwt. Projected third quarter hog prices are listed at $78 per cwt, while fourth quarter price levels continue to focus on price pressure of $65 per cwt. Firmness in steer price values is still expected in 2022 with the September estimate of steer prices increasing to $128 per cwt in 2022, while hog prices continue to weaken, but were unchanged from last month at $56 per cwt.
Total use of beef in 2021 is expected to shift lower by 135 million pounds, with total use of 27.6 billion pounds. Total demand for pork is projected to increase in 2021 by 40 million pounds.
The latest WASDE report is having very little impact in current cattle or lean hog futures, as limited changes in overall production and demand is not enough to overshadow the bearishness of market shifts seen over the last few weeks.
To hear KC's complete Conversation with Rich Nelson at Allendale, click or tap below:
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