Agricultural News
USDA Boosts Corn and Soybean Production Estimates, Markets Slide Lower
Tue, 10 Nov 2015 17:06:49 CST
Traders were looking for higher numbers in the latest crop production reports from the U.S. Department of Agriculture, but Tuesday's reports exceeded expectations. Market Analyst Tom Leffler of Leffler Commodities said there was nothing price friendly in the U.S. Crop Production or World Agricultural Supply and Demand Estimate (WASDE) reports. In response, the futures market made new contract lows in corn, soybeans and Kansas City wheat.
U.S. corn production was forecast at 13.7 billion bushels, up less than one percent from the October forecast, but down four percent from last year's record production. Based on conditions as of November 1, yields were expected to average 169.3 bushels per acre, up 1.3 bushels from the October forecast but 1.7 bushels below the 2014 average. If realized, this will be the second highest yield and third largest production on record for the United States. Area harvested for grain is forecast at 80.7 million acres, unchanged from the October forecast but down three percent from 2014. Leffler said corn saw export sales lowered by 50 million bushels, feed and residual usage increased by 25 million bushels and ethanol usage dropped by 75 million bushels. He said this caused the nation's corn ending stocks to come in at 1.76 billion bushels. That was an increase of 199 million bushels over last month.
The U.S. has set a new record for soybean production and yield, beating out last year's crop. USDA estimated the nation's soybean production at a record 3.98 billion bushels, up two percent from October and up one percent from last year. Based on November 1 conditions, yields were expected to average 48.3 bushels per acre, up 1.1 bushels from last month and up 0.8 bushel from last year. Area for harvest in the United States was forecast at 82.4 million acres, unchanged from last month. Leffler said exports increased by 40 million bushels, the crush was increased by 10 million bushels, but that was not enough to offset the increase of 93 million bushels in production. As a result, the nation's soybean ending stocks were estimated at 465 million bushels, an increase of 40 million bushels over last month.
The nation's wheat ending stocks were increased by 50 million bushels over last month at 911 million bushels. Leffler said this was due to the decline in exports by 50 million bushels. The nation's hard red winter wheat stocks increased to a 16-year high and hard red spring wheat stocks increased to a 25-year high. Leffler said the U.S. numbers continue to show a larger crop and concern over demand for especially wheat and corn.
USDA also released the latest WASDE report on Tuesday. Leffler said the biggest surprise came in the corn numbers. Global corn ending stocks were increased by 24 million metric ton. Leffler said 19 MMT was due to China, as the country claimed consumption dropped causing inventory levels to increase dramatically. Global soybean stocks came in at 2.82 MMT less than last month. Global wheat ending stocks came in at 1.19 MMT less than last month, but continue to be at record levels.
Radio Oklahoma Network's Leslie Smith interviewed Leffer for reaction of both reports. Click or tap on the LISTEN BAR below to listen to the full interview.
Click here for the national crop production report.
Click here for the latest WASDE report.
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