Category: Crop Outlook

December USDA WASDE Summary

Ann Johanns
Chad Hart image

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.

The trade was hoping to receive some additional demand strengthening, but USDA’s update provided next to no changes. The December report is almost always about demand, as the corn and soybean supply numbers are rarely changed in this month’s report (saving up the changes for the “final” estimates in January). The corn numbers remained as in November, with 2020/21 ending stocks at 1.7 billion bushels and the 2020/21 marketing year average price estimate at $4 per bushel. The only demand shift in soybeans was for domestic crush, up 15 million bushels. That lowered 2020/21 ending stocks to 175 million bushels, so the market should be getting close to “pipeline” levels (stock projections that are low enough where price can rise significantly to limit usage and hold the stocks at that level, preserving a small reserve going into the next marketing year). The 2020/21 marketing year average price estimate was raised 15 cents to $10.55 per bushel.

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November USDA WASDE Summary

Ann Johanns
Chad Hart image

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.

Compared to trade expectations, USDA lowered corn and soybean yield and production estimates and raised corn exports by more than expected. The slide in yields was across a broad swath of the country, reflecting the longer-term impacts of the drought and the extremely dry crops were brought in (yield loss due to crop moisture being below to well below average). Corn dropped 2.6 bushels per acre, knocking 215 million bushels out of total production. Soybeans dropped 1.2 bushels per acre, taking 98 million bushels out. For soybeans, the yield drop dominated the other small tweaks and the lack of adjustments to crush and exports. With the new soy stocks to use ratio now below 5%, the report provided another upward leg for the soybean market. USDA raised its 2020/21 season average to $10.40, the futures market was already at $10.60 and added roughly 30 cents today.

For corn, the yield drop was only part of the story. USDA also projected exports to rise to 2.65 billion bushels, a record. The export rise can be chalked up to a near doubling of expected corn sales to China. Most of those Chinese sales have already been made (roughly 85%), but only 15% of the targeted exports to China have been delivered at this point. 2020/21 ending stocks were lowered to 1.7 billion bushels (lowest level since 2013/14) and the USDA season-average price estimate rose to $4 per bushel. The futures market was at roughly $3.70 before the report, so for corn, USDA is already projecting continued price strengthening.

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September’s USDA WASDE Summary

Ann Johanns
Chad Hart image

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.

For corn, national yield was set back to 178.5 bushels per acre, down 3.3 bushels per acre and even with USDA’s earlier trend. With the downward adjustment in harvested area, that subtracts 378 million bushels from production, lowering total production to 14.9 billion bushels. Iowa was estimated at 191 bu/ac (down 11 bu/ac). Illinois was set at 203 bu/ac, down 4 bu/ac. Minnesota was set at 200 bu/ac, up 3 bu/ac. Indiana was set at 186 bu/ac, down 2 bu/ac. On the demand side, exports were lowered 30 million bushels on old crop, but raised 100 million bushels on new crop. Feed and residual was lowered 100 million bushels as well, but the change here is more related to the thought that smaller crop, smaller losses than reduced feed consumption. And ethanol was lowered 5 million bushels for old crop and 100 million bushels for new crop, on the continued drag in fuel usage. The result is 2020/21 ending stocks declined by 253 million and the 2020/21 season-average price estimate rose 40 cents, to $3.50 per bushel.

For soybeans, national yield was set at 51.9 bu/ac, down 1.4 bu/ac from last month. That subtracts 112 million bushels from production, lowering total production to 4.313 billion bushels. Iowa was estimated at 54 bu/ac, down 4 bu/ac. Illinois was set at 62 bu/ac, down 2 bu/ac. Minnesota was set at 52 bu/ac, up 1 bu/ac. Indiana was set at 60 bu/ac, down 1 bu/ac. On the demand side, no adjustments to new crop. Old crop crush was raised 10 million and old crop exports were raised 30 million. Like with corn, soybean 2020/21 ending stocks fell by 150 million bushels and the 2020/21 season-average price estimate rose 90 cents, to $9.25 per bushel.

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August’s USDA WASDE Summary

Ann Johanns
Chad Hart image

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.

For corn, national yield was set at 181.8 bu/ac, up 3.3 bu/ac from trend. That adds 278 million bushels to production, raising total production to 15.278 billion bushels. Iowa was estimated at 202 bu/ac (again, based on Aug. 1 conditions, up 2% from 2019), but the larger improvements in yields were to our north and east. Illinois was set at 207 bu/ac, up 14.4% from last year. Minnesota was set at 197 bu/ac, up 13.9% from last year. Indiana was set at 188 bu/ac, up 11.2% from 2019. On the demand side, exports were increased 20 million bushels on old crop and 75 million bushels on new crop. The weakening of the dollar, the lower prices, and advance export sales are all supporting these changes. Feed and residual was raised 75 million bushels as well, but the change here is more related to the thought that there are larger crop losses (residual use) for a larger crop than increased feed consumption. So usage went up 170 million, but supply grew by 278 million, so 2020/21 ending stocks rose by 108 million and the 2020/21 season-average price estimate dropped a quarter, to $3.10 per bushel.

For soybeans, national yield was set at 53.3 bu/ac, up 3.5 bu/ac from trend.  That adds 295 million bushels to production, raising total production to 4.425 billion bushels. Iowa was estimated at 58 bu/ac (again, based on Aug. 1 conditions, up 5.5% from last year), but the larger improvements in yields were to our north and east. Illinois was set at 64 bu/ac, up 18.5% from last year. Minnesota was set at 51 bu/ac, up 15.9% from last year.  Indiana was set at 61 bu/ac, up 19.6% from 2019. On the demand side, exports were increased 75 million bushels on new crop. The weakening of the dollar, the lower prices, and advance export sales are all supporting these changes.  Crush was raised 20 million bushels and seed and residual usage went up 5 million bushels. Like with corn, soybean supplies grew more than soybean usage, so 2020/21 ending stocks rose by 185 million bushels (to 610 million bushels) and the 2020/21 season-average price estimate dropped 15 cents, to $8.35 per bushel.

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April’s USDA WASDE and Export Sales reports

Ann Johanns

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.

Chad Hart image

In the reports released today, usage declined, but by less than the trade expected, so futures moved slightly higher with the release of the report. For corn, feed usage was increased by 150 million bushels.  This is due to corn directly replacing part of the loss of distillers grains as ethanol plants close and distillers disappears. Ethanol usage of corn declined by a staggering 375 million bushels. At least eight ethanol plants that have idled, with many more slowing production. The weekly fuel report from the Energy Information Administration showed a roughly 40% cut in ethanol production over the past two weeks. Add in a couple of other minor adjustments and ending stock projections rose 200 million bushels, putting 2019/20 ending stocks at just shy of 2.1 billion bushels. USDA lowered its 2019/20 marketing year price estimate 20 cents, to $3.60 per bushel.

For soybeans, crush was raised 20 million bushels, but exports were lowered 50 million. The increased crush is to create more soybean meal (again, replacing distillers grains). Export pace, while improving, has been well below what was needed to reach USDA’s original export estimate. Factor in a 25 million bushel drop in seed and residual (mainly an adjustment to the planted acreage number), and 2019/20 ending stocks rose 55 million bushels to 480 million in total. The 2019/20 marketing year average price estimate was lowered 5 cents to $8.65 per bushel.

While the WASDE report did not reflect positive news from exports. The weekly Export Sales report did show higher than expected corn sales, along with soybean sales that were within expectations, but at the higher end. China has been a pleasant surprise in the corn market (up 88% for the year). The Asian markets, outside of China, have been improving for soybeans.

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