USDA Report Sept 11th, 2020

USDA September 11th, 2020 Recap

 Last week the USDA updated their estimates.

Traders did a good job with their estimates, and as such there weren’t many surprises to the markets.

Corn ending stocks for 20/21 dropped around 250,000 MT. The largest contributing factor to this was storm damage in Iowa, which represented a loss of over 500,000 harvested acres of corn. Yields were also reduced from 181.8 bu/ac to 178.5 bu/ac. Despite such a large drop, this still represents a record high for corn ending stocks.

This falls right in line with what was expected by the market. With few surprises coming from the USDA report, attention has begun to shift towards harvest activity.

Soybeans ending stocks for 20/21 dropped by 150,000 MT. Droughts across Illinois and Iowa hit at a crucial time, damaging their crop and lowering yields. In combination with this, China has been a strong and steady buyer of U.S. beans over the past month. This helps to explain the rallies we have seen in the price of soybeans over the past month.

It is debatable whether current Chinese buying is meant to meet domestic need, or stockpile in case trade relations deteriorate between China and the U.S. While there are reports of floods and typhoons damaging China’s domestic crop, current President Donald Trump has also been explicit in his desire for less trade with China. Both explanations are entirely possible.

Wheat ending stocks have remained unchanged. There seems not to be enough recent news to change things either way.

Most of this information was already priced into the markets. Directly after the report, corn prices stayed flat, while beans saw an additional rally, likely reflecting the difference between trader’s estimate and USDA estimate of ending stocks.

A summary of the numbers is below:

USDA 2020-21 U.S. corn and soybean production

USDA Sep.

2020-21

Estimate

Average of

Analysts’

Estimates

USDA Aug.

2020-21

Estimate

Range of

Analysts’

Estimates

CORN
Yield 178.5 178.3 181.8 175.4-181.0
Production 14.900 14.898 15.278 14.743-15.095
Harvested area 83.5 83.5 84.0 82.7-84.2
SOYBEANS
Yield 51.9 51.8 53.3 50.8-52.9
Production 4.313 4.295 4.425 4.217-4.391
Harvested area 83.0 82.9 83.0 82.5-83.0

 

USDA 2019-20 U.S. grain and soybean ending stocks

USDA Sep.

2019-20

end-stocks

estimates

Average of

analysts’

estimates

USDA Aug.

2019-20

end-stocks

estimates

Range of

analysts’

estimates

 
Corn 2.253 2.234 2.228 2.138-2.326
Soybeans 0.575 0.600 0.615 0.574-0.620

 

USDA 2020-21 U.S. grain and soybean ending stocks

USDA Sep.

2020-21

end-stocks

estimates

Average of

analysts’

estimates

USDA Aug.

2020-21

end-stocks

Range of

analysts’

estimates

estimates  
Wheat 0.925 0.924 0.925 0.900-0.978
Corn 2.503 2.451 2.756 2.177-2.589
Soybeans 0.460 0.465 0.610 0.379-0.551