USDA Upcoming August 12th "Supply & Demand" Report
Aug 06, 2013
Below are a few insights into what the trade seems to be thinking:
- Corn - Thoughts are total US new-crop corn production estimates are moving higher from the current 13.95 billion bushels estimate to levels north of 14.0 billion bushels. Keep in mind this compares to last years production of just 10.780 billion bushels. Corn yields are also thought to be moving higher from the current USDA estimate of 156.5 bushels per acre. Thoughts are closer to 158 or maybe even 159 might be in order considering the recent weather. Remember, tis compares to last years 123.4 bushel yield. I doubt the USDA will cut harvested acres in this report, thinking they will wait until at least Sept or Oct in order to see the FSA insurance numbers. Therefore most are thinking new-crop corn ending stocks will now move above 2.0 billion bushels. There is also talk that world supplies will jump higher as well. All in all we have a bearish tilt across the board for corn. Just keep in mind with most ALL sources expecting a bearish report the actual surprise could be to the upside if the numbers do not come out as bad as anticipated.
- Soybeans - Thoughts are the total US soybean production estimate is moving lower from the current USDA estimate of 3.420 billion bushels. Most talk is for a reduction to around 3.320 billion bushels, a reduction of 100 million bushels, still higher than the 3.015 billion bushels produced last year. Yield is also expected to fall from 44.5 bushels down to around 43.5 bushels per acre. Keep in mind this is still much higher than last years yield of 39.6 bushels per acre. My guess is new-crop ending stocks will in turn fall from the current 295 million bushel estimate down to around 270 million bushels. I doubt the USDA will make many cuts in overall demand at this stage of the game. Even though I believe Chinese soy imports are still too high. Not so certain before all is said and done domestic demand might be a little high as well. Keep in mind, as I mentioned above most in the trade are looking for slightly bullish soybean numbers, this causes me to believe the surprise could be negative bean prices, especially if the USDA hesitates in making the production and yield cuts that are expected.
- Wheat - There seems to be some consensus that US ending stocks may move slightly higher on an increase in US production and less overall demand. Depending on who you talk to we are hearing a variety of estimates, but if you held a gun to my head I would have to say most are looking for just a little bit better production numbers in winter, spring and even durum wheat. Keep in mind however these numbers are still significantly lower than last years.
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