Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.
The July USDA World Ag Supply and Demand Estimates (WASDE) report held some interesting nuggets for the market to chew on. Starting with the 2014 crops, demand remained robust as all of the major demand sectors were increased for the crops in the bins. Corn feed demand was increased 50 million bushels. Ethanol demand for corn was raised 25 million bushels. Corn export demand was also increased 25 million bushels. Soybean crush bumped up 15 million bushels and soybean exports were increased the same amount. These changes pulled 2014/15 ending stocks below the average trade expectations and allowed USDA to increase its season-average price estimate for corn to $3.70 per bushel, up 5 cents from last month. The soybean season-average price estimate remained at $10.05 per bushel.
Looking at the 2015 crops, the acreage numbers from last month’s report were the only update on the supply side. So yield and production estimates came in above trade expectations as the trade was looking for a downshift in yields given the weather issues this spring and summer. Current estimates have the national average corn yield at 166.8 bushels per acre and the national average soybean yield at 46 bushels per acre. Given the June acreage numbers, that would put production at 13.53 billion bushels for corn and 3.885 billion bushels for soybeans. Both of those numbers were roughly 100 million bushels above trade expectations.
On the demand side for the 2015 crops, the news was mixed. Increases were reported for corn usage in ethanol and for soybean crush. However, corn feed usage and exports were lowered. The end result is lower 2015/16 ending stocks than previously estimated by USDA, but the numbers still exceeded trade expectations. Corn stocks were projected at 1.6 billion bushels, while soybean stocks stood at 425 million bushels. With the tightening of the stocks for 2015/16, USDA increased both the corn and soybean season-average price estimates by 25 cents per bushel, with corn at $3.75 per bushel and soybeans at $9.25 per bushel.
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