As harvest nears completion, both producer reports and private forecasts for average corn and soybean yields and production are closing the gap with USDA’s October estimates. But demand estimates could show big swings when USDA releases its World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports Wednesday, Nov. 9.
“Many people will be discussing production and yield, but we aren’t too interested in those numbers,” says Rich Nelson, director of research for Allendale. The private forecasting firm, headquartered in McHenry, Ill., expects a corn yield of 147.8 bu./acre, which is lower than USDA's 148.1 bushels. If realized, Allendale’s expected yield would put total corn production at 12.406 billion bushels.
“We are most interested in the demand numbers,” says Nelson. “We are increasing export estimates for corn by 50 million bushels over USDA’s latest estimate. We have already sold 50 percent of USDA’s hoped-for sales.” Typically at this time of year, only 39% of expected corn exports for the September through August crop year have been sold. “We have done a much better job exporting than USDA was expecting,” Nelson adds.
Allendale anticipates USDA will raise its average soybean yield of 41.4 bu./acre to 41.5 bushels and expects USDA to raise Brazil’s soybean production by 1 million metric tons to 74.5 million metric tons.
One area of contention among analysts, according to Nelson, is soybean demand. “We are behind pace to meet USDA’s expected soybean exports,” he says. “But we expect exports to improve by December.” Analysts, including Allendale, expect USDA to lower soybean exports. As a result, some analysts think USDA will raise ending stocks on soybeans from its current estimate of 160 million bushels to as high as 240 million bushels, he says. Allendale is expecting a much smaller increase to 180 million bushels.
Allendale also expects USDA to lower corn ending stocks from 866 million bushels to 795 million bushels but raise ending stocks on wheat to 891 million bushels from the current 837 million bushels due to poor export sales.
Kansas City-based FCStone also released estimates this week. The risk management consulting firm lowered its average corn yield estimate to 148.4 bu./acre from last month’s estimate of 148.7, whcih would put total production at 12.457 billion bushels. Unlike Allendale’s estimate, FCStone’s is still above USDA’s October estimate of 148.1.
FCStone also reduced its estimate for the average soybean yield to 42.2 bu./acre, down from its previous-month estimate of 42.8 bu./acre but still above USDA’s 41.5 bushels. FCStone’s estimate for total soybean production is 3.109 billion bushels.
“Other than the production estimates, the trade will be interested in updated export forecasts, particularly in soybeans which have had a very slow start to the export season,” says Ben Parks, risk management consultant for FCStone. “Acreage is still an unknown. USDA reduced corn acreage by 500,000 and soy acreage by 300,000 in last month’s report, but I think there is still some trade sentiment that the actual numbers are smaller yet.”
Like Nelson, Parks also thinks USDA could increase world wheat stocks. “World wheat stocks were revised sharply higher this past month, from 194.6 million metric tons in September to 202.37 million metric tons in October. “Feed wheat has been replacing global corn demand for the past several months, which has particularly come to light in the past two weeks following a Chinese purchase of Australian wheat. If USDA again increases world wheat stocks, the impact is also likely to be felt in the corn market as the trade anticipates reduced feed demand for corn.”
Informa’s estimate for average corn yield was also higher than USDA’s October estimate but unchanged from the firm’s previous 149.5 bu./acre, and total production is expected at 12.549 billion bushels. The private forecasting firm, based in Zug, Switzerland, lowered its soybean yield estimate from 41.8 bu./acre last month to 41.5 bushels this month—the same as USDA’s October yield. Informa expects soybean production of 3.082 billion bushels.
AgWeb Harvest Map
Producers reporting to AgWeb’s Harvest Map represent nearly 300,000 acres of corn and 140,000 acres of soybeans. The average reported corn yield from these growers of 147.62 bu./acre is also approaching USDA’s latest estimated average yield but is lower than Allendale’s, FCStone’s, and Informa’s latest estimates. The average soybean yield reported by the growers, however, now outperforms USDA’s lastest estimate by nearly 5 bu./acre.
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