WINNIPEG,(MarketsFarm) – With the markets largely range-bound since the end of June, the United States Department of Agriculture (USDA) released its long-awaited supply and demand report late Monday morning.
The initial reaction on the markets was bearish, with corn prices being hit very hard, down 25 U.S. cents per bushel for the September and December contracts on the Chicago Board of Trade.
Wheat in Chicago and Kansas City took a big blow as well, falling 24 to 27 cents per bushel. Minneapolis wheat fared somewhat better, with declines of six to eight cents per bushel.
The Chicago soy complex took significant losses, with soybeans down 11 to 12 cents per bushel. Soyoil dipped 0.07 to 0.15 of a cent per pound, while soymeal dropped US$2.30 to US$4.70 per hundredweight.
The monthly World Agricultural Supply and Demands Estimates (WASDE) for August contained data from a resurvey of planted acres, especially those for corn and soybeans. The USDA’s acreage report, issued at the end of June, was considered to have been seriously flawed by the markets and producers. That being the survey for the report was too early, having missed a truer picture of what U.S. farmers planted this year. The July WASDE didn’t clear up of the matter, as it relied on that skewed data.
In the August report, corn came in at 90.00 million acres, which was down from the USDA’s previous estimate of 91.70 million. Market expectations called for 83.50 million to 89.90 million acres.
The USDA forecast 82.00 million acres to be harvest, down from 83.60 million in the July report. In 2018, an estimated 81.70 million acres was harvested.
Corn production was pegged at 13.90 billion bushels, up slightly from the USDA’s June estimate at 13.88 billion bushels. Trade predictions were lower, at 12.70 billion to 13.16 billion bushels.
The carryout for corn has now been forecast to be 2.18 billion bushels, down from the USDA’s 2.34 billion in June.
There is to be 76.70 million acres of soybeans. That’s down from its previous forecast of 80.04 million acres. Trade predictions called for 78.00 million to 83.50 million acres.
The USDA estimated 75.90 million acres of soybeans are to be harvested, dropping from the July’s 79.30 million and much lower than the 88.10 million in 2018.
Soybean production was revised to 3.68 billion bushels, down from 3.85 billion in the July WASDE. The markets called for 3.78 billion to 3.82 billion bushels.
The soybean carryout was placed at 755.00 million bushels, down from July’s estimate of 1.05 billion. The markets predicted 1.07 billion bushels.
Total wheat was unchanged at 45.60 million acres, which remains the lowest amount to grown by U.S. farmers in 100 years. The USDA kept its harvest projection at 38.40 million acres, which is down from last year’s 39.60 million.
The supply and demand report forecast 1.98 billion bushels of wheat this year, down from 1.92 billion in June. Trade predictions ranged from 1.87 billion to MarketsFarm’s 1.94 billion bushels.
The carryout was slated to be 1.01 billion bushels, up a little from the previous report’s 1.07 billion.