Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
USDA Hikes U.S. Corn, Soybean Crop Production Estimate
U.S. CROP PRODUCTION (Million Bushels) 2009-10
|
Sept |
Aug |
Avg |
High |
Low |
2008-09 |
|
| Corn |
12,955 |
12,761 |
12,901 |
13,127 |
12,628 |
12,101 |
| Soybeans |
3,245 |
3,199 |
3,249 |
3,356 |
3,150 |
2,959 |
| Grain Sorghum |
390 |
381 |
385 |
405 |
365 |
472 |
U.S. AVERAGE YIELD (Bushels Per Acre) 2009-10
|
Sept |
Aug |
Avg |
High |
Low |
2008-09 |
|
| Corn |
161.9 |
159.5 |
161.4 |
164.1 |
158.7 |
153.9 |
| Soybeans |
42.3 |
41.7 |
42.4 |
43.7 |
41.0 |
39.6 |
U.S. ENDING STOCKS (Million Bushels) 2009-10
|
Sept |
Aug |
Avg |
High |
Low |
|
| Corn |
1,635 |
1,621 |
1,769 |
1,989 |
1,557 |
| Soybeans |
220 |
210 |
226 |
367 |
174 |
| Grain Sorghum |
50 |
51 |
56 |
62 |
50 |
| Wheat |
743 |
743 |
773 |
871 |
743 |
U.S. ENDING STOCKS (Million Bushels) 2008-09
|
Sept |
Aug |
Avg |
High |
Low |
2007-08 |
|
| Corn |
1,695 |
1,720 |
1,699 |
1,720 |
1,500 |
1,624 |
| Soybeans |
110 |
110 |
104 |
110 |
80 |
205 |
WORLD ENDING STOCKS (Million Metric Tons)
|
2009-10 |
2008-09 |
|||
|
Sept |
Aug |
Sept |
Aug |
|
| Wheat |
186.61 |
183.56 |
168.99 |
169.50 |
| Corn |
139.12 |
141.49 |
144.69 |
144.08 |
| Soybeans |
50.53 |
50.32 |
40.22 |
41.00 |
WORLD PRODUCTION (Million Metric Tons)
|
2009-10 |
2008-09 |
|||
|
Sept |
Aug |
Sept |
Aug |
|
| Brazil soybeans |
62.0 |
60.0 |
57.0 |
57.0 |
| Arg. soybeans |
51.0 |
51.0 |
32.0 |
32.0 |
| Brazil corn |
52.0 |
54.0 |
50.0 |
50.0 |
| Argentine corn |
14.0 |
15.0 |
12.6 |
13.0 |
| Australia wheat |
23.0 |
23.0 |
21.5 |
21.5 |
| Canada wheat |
22.5 |
22.5 |
28.6 |
28.6 |
Summary
As expected, USDA raised its estimates of corn and soybean production in the September report released this morning. Corn production is now estimated at 12.955 billion bushels, up from 12.761 billion bushels last month, slightly above the average pre-report estimate. Soybean production is now projected at 3.245 billion bushels, up from 3.199 billion bushels in August and near the average pre-report guess.
USDA raised the average corn yield to 161.9 bushels per acre, from 159.5 bushels per acre in August. If realized, this will be the highest corn yield on record, and production will be the second largest, behind 2007. USDA said yield forecasts increased across the Western Corn Belt and the northern half of the Great Plains as mild temperatures and adequate soil moisture supplies provided favorable growing conditions. Yields were unchanged in the Eastern Corn Belt where dry conditions in August depleted soil moisture supplies.
For soybeans, USDA raised its average yield to 42.3 bushels per acre, from 41.7 bushels per acre estimated a month ago. This would be the third highest yield on record for soybeans. Yields are forecast higher or unchanged in all states except Indiana, where the yield is expected to be down 2 bushels. Record-high yields are forecasted in Alabama, Georgia and Mississippi, while yields in Nebraska, North Carolina and Ohio tie previous record highs.
Ending Stocks
USDA hiked estimates for 2009/10 ending corn stocks to 1.635 billion bushels (up 14 million bushels from the 1.621 billion bushels in August) as the 194 million bushel increase in production was partly offset by a 100 million bushel increase in feed; a 100 million bushel increase in corn for ethanol; and a small decrease in projected imports from Canada. USDA also cut old-crop ending stocks 25 million bushels, reflecting higher expected corn use for ethanol.
Corn season average prices are projected between $3.05 and $3.65, down 5 cents on the low side and 25 cents on the upper end.
For soybeans, USDA took 2009/10 ending stocks up 10 million bushel to 220 million bushels, with the 46 million bushel increase in production partly offset by a 20 million bushel increase in crush; a 15 million bushel increase in exports; and a 1 million bushel increase in residual use.
USDA now projects season average prices for soybeans to range between $8.10 and $10.10, down 30 cents from August.
World Estimates
In the World Agricultural Supply and Demand Estimates, USDA hiked world wheat 2009/10 ending stocks to 186.61 million metric tons (up 3 MMT from last month). World corn ending stocks were reduced 2.4 MMT, to 139.12 MMT; soybean stocks were raised slightly, to 50.53 MMT.
The increase in wheat stocks reflects hikes in production for the EU-27 and Russia. Corn production is lowered for China, Brazil, Argentina, Canada, Kenya and EU-27. Increases in U.S. soybean and Brazilian output (Brazil was hiked 2 MMT) were partly offset by cuts in China, India and Canada.
Market Strategy
The report is likely to be viewed as somewhat bearish. Trader attention will now turn to the impact that the weather has on finishing ‘09 U.S. corn and soybean production. The estimates given above were based upon crop conditions as of September 1. Corn and soybean futures are currently being supported by being oversold, crude oil price increases, and the declining value of the dollar. Farmer attention will now turn to which crop to favor storing, corn or soybeans, and which sales methods to employ. One suggestion, consider selling July $4.00 corn options. Before employing said strategy, it is imperative to understand how it works?
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.