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Pro Farmer Reaction: No Surprises in USDA Data

November 9, 2011

 ** CROP PRODUCTION REPORT **

  • CORN: 12.310 billion bu.; trade expected 12.402 billion bu.
    -- compares to Oct. est. of 12.433 bil. bu; 12.447 bil. bu. in 2010
  • BEANS: 3.046 billion bu.; trade expected 3.059 billion bu.
    -- compares to Oct. est. of 3.059 bil. bu.; 3.329 bil. bu. in 2010
  • COTTON: 16.30 million bales; trade expected 16.40 million bales
    -- compares to Oct. est. of 16.608 mil. bales; 18.1 mil. bales in 2010

USDA's corn crop estimate came in 123 million bu. below its October peg and 92 million bu. below the average pre-report trade guess. USDA made no changes to harvested acreage this month. The national average yield is put at 146.7 bu. per acre, down 1.4 bu. from October.

Compared to last month, USDA showed corn yield declines in: North Dakota (down 11 bu., to 110 bu.); Minnesota (down 5 bu., to 160 bu.); South Dakota (down 4 bu., to 135 bu.); and Illinois (down 3 bu., to 156 bu. per acre). Yields were held steady in Indiana (145 bu.); Michigan (148 bu.); Missouri (115 bu.); Nebraska (160 bu.); and Wisconsin (160 bu. per acre). Yield increases were reported in Iowa (up 2 bu., to 171 bu.); and Ohio (up 5 bu., to 159 bu. per acre).

USDA's soybean crop estimate came in 14 million bu. under its October peg and 13 million bu. below the average pre-report trade guess. USDA made no changes to harvested acreage this month. The national average yield is now put at 41.3 bu. per acre, down 0.2 bu. from October.

Compared to last month, soybean yields were down 1 bu. per acre in Minnesota (40 bu.), Nebraska (53 bu.), North Dakota (28 bu.) and South Dakota (38 bu. per acre). Yields were held steady in Arkansas (37 bu.), Illinois (46 bu.), Indiana (42 bu.), Iowa (50.5 bu.), Michigan (44 bu.), Missouri (37 bu.) and Ohio (46 bu. per acre). Wisconsin saw a 2-bu. yield increase from October to 47 bu. per acre.

USDA's cotton crop estimate is down 308,000 bales from last month and came in 100,000 bales below the average pre-report trade guess. USDA made no changes to harvested acreage. The national average yield is now put at 794 lbs. per acre, down 15 lbs. from last month. Big yield declines were noted in Texas, Georgia and California.

Note: "Survey respondents who reported barley, oat, Durum wheat, or other spring wheat acreage as not yet harvested in Idaho, Maine, Montana, North Dakota, Oregon, and Washington during the surveys conducted in preparation for the Small Grains 2011 Summary were re- contacted in late October to determine how many of the acres were actually harvested and record the actual production from those acres. Based on this updated information, several changes were made to the estimates published in the Small Grains 2011 Summary. Because unharvested production is a component of on-farm stocks, changes were made to the September 1 on-farm stocks levels comparable with the production adjustments."


 

** 2011-12 U.S. CARRYOVER **

  • CORN: 843 million bu.; down from Oct. proj. of 866 million bu.
    -- compares to 1.128 billion bu. in 2010-11
  • BEANS: 195 million bu.; up from Oct. proj. of 160 million bu.
    -- compares to 215 million bu. in 2010-11
  • WHEAT: 828 million bu.; down from Oct. proj. of 837 million bu.
    -- compares to 861 million bu. in 2010-11
  • COTTON: 3.8 million bales; down from Oct. proj. of 3.9 million bales
    -- compares to 2.6 million bales in 2010-11

USDA lowered its corn ending stocks projection by 23 million bu. from last month. To get there, USDA lowered total supply by 123 million bu. and only partially offset that with a 100-million-bu. reduction in total use. All of the cut in use came in the feed and residual category, which is now projected at 4.6 billion bushels. USDA's national on-farm cash price projection is unchanged from last month at $6.20 to $7.20.

USDA raised its soybean carryover projection by 35 million bu. from October. USDA's total supply projection was lowered 15 million bu. (smaller crop) from last month. But USDA lowered total use by 50 million bu., with all of the cut coming in projected exports (1.325 billion bushels). The reduction in total use came despite a 55-cent cut to the national average on-farm cash price, which now stands at $11.60 to $13.60.

USDA's wheat carryover projection came in 9 million bu. below last month. On the supply side, USDA lowered its production estimate by 9 million bu. after resurveying producers for durum and spring wheat production. USDA made no changes to usage projections. USDA now sees a national average on-farm cash price of $7.05 to $7.75, down a nickel on the bottom end and down 15 cents on the top end of the range.

USDA lowered its cotton carryover projection by 100,000 bales from last month. Total supply was reduced 310,000 bales due to the smaller crop estimate. Partially offsetting the smaller supply was a 210,000-bale reduction in total use, the result of a 200,000-bale cut to projected exports (11.3 million bales) and a 10,000-bale reduction in unaccounted use. USDA's national on-farm cash price projection now stands at 84.0 cents to 96.0 cents, down 3.5 cents on the bottom end and down 6.5 cents on the top end of the range.


** 2011-12 GLOBAL CARRYOVER **

  • CORN: 121.57 MMT; down from 123.19 MMT in Oct.
    -- compares to 129.04 MMT in 2010-11
  • BEANS: 63.56 MMT; up from 63.01 MMT in Oct.
    -- compares to 68.37 MMT in 2010-11
  • WHEAT: 202.60 MMT; up from 202.37 MMT in Oct.
    -- compares to 196.13 MMT in 2010-11
  • COTTON: 54.96 mil. bales; up from 54.83 mil. bales in Oct.
    -- compares to 45.22 million bales in 2010-11

** 2011-12 GLOBAL PRODUCTION HIGHLIGHTS**

  • ARGENTINA BEANS: 52.0 MMT; compares to 53.0 MMT in October
    -- compares to 49.0 MMT in 2010-11
  • BRAZIL BEANS: 75.0 MMT; compares to 73.5 MMT in October
    -- compares to 75.5 MMT in 2010-11
  • ARGENTINA WHEAT: 13.0 MMT; compares to 13.5 MMT in October
    -- compares to 15.5 MMT in 2010-11
  • AUSTRALIA WHEAT: 26.0 MMT; compares to 26.0 MMT in October
    -- compares to 26.0 MMT in 2010-11
  • CHINA WHEAT: 117.0 MMT; compares to 117.0 MMT in October
    -- compares to 115.18 MMT in 2010-11
  • CANADA WHEAT: 24.2 MMT; compares to 24.2 MMT in October
    -- compares to 23.17 MMT in 2010-11
  • EU-27 WHEAT: 137.49 MMT; compares to 136.33 MMT in October
    -- compares to 135.67 MMT in 2010-11
  • RUSSIA WHEAT: 56.0 MMT; compares to 56.0 MMT in October
    -- compares to 41.51 MMT in 2010-11
  • FSU-12 WHEAT: 112.45 MMT; compares to 110.45 MMT in October
    -- compares to 80.97 MMT in 2010-11
  • CHINA CORN: 184.5 MMT; compares to 182.0 MMT in October
    -- compares to 177.25 MMT in 2010-11
  • ARGENTINA CORN: 29.0 MMT; compares to 27.5 MMT in October
    -- compares to 22.5 MMT in 2010-11
  • SOUTH AFRICA CORN: 12.5 MMT; compares to 12.5 MMT in October
    -- compares to 11.8 MMT in 2010-11
  • BRAZIL CORN: 61.0 MMT; compares to 61.0 MMT in October
    -- compares to 57.5 MMT in 2010-11
  • CHINA COTTON: 33.5 mil. bales; compares to 33.5 mil. bales in Oct.
    -- compares to 30.5 mil. bales in 2010-11

** WHAT ARE THE CALLS? **

Based on this morning's USDA data, traders are calling corn 4 to 8 cents higher and wheat steady to 3 cents higher, while opening calls for soybeans range from 5 to 7 cents lower to 2 to 4 cents higher. Given highly negative outside markets, grain and soy futures may be hard pressed to find sustained buying interest today.


 

 

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RELATED TOPICS: Corn, Soybeans, Wheat, Cotton, USDA, Analysis

 
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