Agricultural News
Allendale Finds USDA Corn Yields Lower than Expected
Tue, 12 Aug 2014 17:32:44 CDT
A projected record US corn crop would indicate that the US Department of Agriculture's corn numbers are bullish, but one analyst believes its unlikely the market will trade it. After the release of monthly crop production report and the monthly supply demand report, Allendale Analyst Rich Nelson said USDA's yield estimate of 167.4 bushels per acre was too low in being below every single guess of the various 26 analysts surveyed by Reuters Newswire ahead of this report. The average guess for yields was 170.1.
"The trade feels very clearly that yields are much higher than USDA's number 167.4 and this is only one small move in a general long-term move which will take months for USDA to actually recognize the true extent of this year's supply," Nelson said.
Traders also made higher estimates for production and ending stocks. Nelson said while USDA's numbers are smaller than expected, he said no one will trade this as a bullish report. The trade and Allendale believes there is a nation wide yield of 170 at a minimum.
Soybean estimates came in on target. Nelson said the yield estimate for soybeans came in close to pre-report estimates at 45.4 bushels per acre. USDA is estimating production of 3.8 billion bushels. New crop ending stocks came in at 430 million bushels.
Wheat numbers came in higher than expected with a 38 million bushel increase. Nelson said spring wheat only accounted for 7 million bushels and winter wheat production increased by 30 million bushels showing USDA found some good production in those yields as they moved their surveys further north. Wheat ending stock increased to 663 million bushels, which was on target with estimates.
To watch Rich Nelson's full video analysis of today's numbers, click in the video box below.
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