USDA WASDE October 11, 2018
Thursday, October 11, 2018, 12:10 PM
Submitted by: Landus Cooperative
Today the USDA published their monthly supply and demand estimate report. It was a bit surprising to the corn market. The market average guess for yield was 181.8 bu/acre vs. the 181.3 bu/acre published in September. Today the USDA published 180.7, .6 bu lower than the September report. The initial reaction pushed the corn market about 10c higher. It has settled back a little, now trading 6c higher. The most surprising thing on the corn side today was the fact that production dropped while carryout increased. USDA dropped Feed/Residual by 148 mln bu from 17/18, effectively increasing the crop size from last harvest. Many in the trade expected this was the case (an underestimated 17/18 crop). With last year’s carryout increasing, that means 18/19 carry-in increased an equal amount. USDA pushed corn exports up by 75 mln bu. All-in-all, carryout increased by about 40 mln bu to 1.813 bln bu.
Soybeans were more “in-line” with estimates. Published yield this month was 53.1 bu/acre vs. average trade guess of 53.3 bu/acre and 52.8 bu/acre last month. Oddly enough, production dropped in soybeans due to a drop in the planted acres number (planted acres are given the official “final” stamp in January). They also increased Last Year’s soybean yield by .2 bu/acre. That pushed 17/18 carryout and 18/19 carry-in to 438 mln bu. This 17/18 adjustment flowed right to the bottom line of 18/19 pushing carryout to 885 mln bu. USDA did not adjust export estimates. Given our current trade situation, it is hard to believe that our exports will only drop by 70 mln bu vs. last year (like the USDA is currently estimating). Any drop in exports will likely add to an already burdensome carryout number.
Have a great day!