Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.
Record Crops, But Somewhat Smaller Than Expected (8/12/14)
The USDA’s WASDE and Crop Production reports were released today. These reports were heavily anticipated by the markets as they represent the first set of estimates based on objective data from the field. The pre-trade expectations were for both crops to reach record production levels. And on that count, the reports agreed. But the production levels projected by USDA are slightly smaller than expected. For corn, the adjustments actually start with the 2013 crop. As we finish up the 2013 marketing year, corn demand has continued to build. In these latest numbers, USDA increased ethanol demand by 45 million bushels and export demand by 20 million bushels. Those changes cut ending stocks to 1.18 billion bushels, which was outside the range of pre-trade expectations. For the 2014 corn crop, there were a number of shifts on both the supply and demand front. The national yield was estimated at 167.4 bushels per acre. That’s up 2.1 bushels from USDA’s original estimate and up 8.6 bushels from last year. Given that yield, production is pegged at just over 14 billion bushels, topping last year’s record. However, the trade was looking for production in 14.2 billion bushel range, so the corn crop is a little lighter than anticipated. Feed, ethanol, and export demand were all increased, raising total demand to 13.435 billion bushels. Carryout stands at 1.8 billion bushels. The midpoint of the 2014/15 season-average price range was lowered to $3.90 per bushels, down 10 cents from last month.
For soybeans, the shifts for the 2013 crop basically offset each other, leaving ending stocks at 140 million bushels and a season-average price of $13 per bushel. For the 2014 crop, the yield was increased by 0.2 bushels per acre to a national average of 45.4 bushels per acre. That puts production at 3.816 billion bushels. Demand for the 2014 crop was left unchanged, so the production increase was absorbed into ending stocks. Carryout was raised to 430 million bushels for the 2014/15 crop and the midpoint of the 2014/15 season-average price range was lowered 15 cents to $10.35 per bushel.
Ag Decision Maker (AgDM) 
An agricultural economics and business website.
