USDA expecting much larger, possibly record-setting corn crop

Source: ICIS News

2018/08/10

HOUSTON (ICIS)--A larger-than-expected corn crop is forecast by the US Department of Agriculture (USDA), the agency said in its August World Agricultural Supply and Demand Estimate (WASDE) report on Friday.

The USDA also is calling for greater feed and residual usage, increased exports and larger ending stocks for the key crop commodity.

Corn production is forecasted at 14.6bn bushels, up 356m from the July projection.

The agency stated that the season’s first survey based corn yield forecast at a record 178.4 bushels/ acre is 4.4 bushels higher than last month’s trend-based projection.

If achieved it would be up 1.8 bushels from 2017, the highest yield on record in the US.

Illinois, Indiana, Nebraska, Ohio, North Dakota, and South Dakota are forecast to have yields above a year ago.

The yield for Iowa is unchanged relative to last year. Missouri, Minnesota and Kansas are forecast below a year ago.

The USDA noted that at the end of July, 72% of this year’s corn crop was reported in good or excellent condition, 11 percentage points above the same time last year.

Feed and residual use is up based mostly on a larger crop and lower expected prices.

In terms of exports, the August WASDE has raised that number and is reflecting what the agency termed as the US export competitiveness and expectations of reduced competition from Brazil.

With supply rising faster than use, ending stocks are raised 132m bushels to 1.7bn.

The USDA did adjust the season average corn price, moving it down 20 cents at the midpoint for a range of $3.10-4.10/bushel.

For soybeans the agency is calling for higher production, increased yield and higher exports.

Looking at soybean production the new forecast is for 4.59bn bushels, up 276m bushels on higher yields, and is a 4% increase year on year.

Harvested area is forecast at 88.9m acres, which is unchanged from the July projection.

The agency said the first survey-based soybean yield forecast of 51.6 bushels per acre is 3.1 bushels above last month and 2.5 bushels above last year.

Record soybean yields are expected in Alabama, Illinois, Indiana, Kentucky, Mississippi, Nebraska, Ohio and Pennsylvania.

As higher production more than offsets lower beginning stocks, soybean supplies for 2018-19 are projected at a record 5.04bn bushels.

With larger supplies, crush and exports are raised 15m and 20m bushels respectively. Ending stocks are projected at 785m bushels, up 205m from last month.

The August WASDE did adjust the season-average soybean price down 35 cents from last month to $8.90/bushel at the midpoint.

The USDA said the next WASDE will be released on 12 September.