The countdown is on. On Monday, Aug. 12, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE). This year’s August reports will include more information than ever before, including the resurvey announced in June, satellite data and, for the first time ever, FSA acreage certification information.
This report has the potential to be a market mover and hold several surprises, market analysts say.
“There is no question that the upcoming reports are critical as they should technically set the baseline for production that should have been set six weeks ago, and as such, holds the potential to generate quite a bit of excitement either higher or lower next week,” says Dan Hueber, general manager of The Hueber Report.
Hueber has one big prediction for Monday: “We will experience 30 seconds to a minute of market insanity when the figures are released.”
“Of course, there is a lot of talk about this report,” says Joe Vaclavik, founder and president of Standard Grain. “A lot of people think the USDA will provide us with more clarity in regard to the production situation for corn and soybeans.”
Vaclavik says USDA should provide some certainty around the acreage situation, based on the extensive resurvey it did in July. But yields remain a huge question market.
“I think will continue to be debated through harvest,” he adds. “In any year, it is difficult to predict yields in August. This year, the crop is very late, and maturity is lagging, along with enormous variability.”
Heading into the report, analysts expect a decline in planted and harvested corn acres and a rise in soybean acres, reports Kevin McNew, chief economist at Farmer's Business Network. That’s based on the Reuters pre-survey poll of analysts.
For corn, the average estimate for planted acres is 88 million acres. That’s 3.1 million acres lower than the July WASDE. Harvested acres are pegged at 80 million acres, which is 3.4 million acres lower than the July estimates.
Corn yields are predicted to be 164.9 bu. per acre, which is down 1.1 bu. from July.
For soybeans, the average estimate for planted acres is 81 million acres, which is up 1 million acres from the July WASDE. Harvested acres are predicted to be 79.9 million acres, which is up around 0.6 million acres form July.
Soybean yields are predicted to be 47.6 bu. per acre, which is down 0.9 bu. from July.
“At FBN, we believe that the range of estimates for corn planted, harvested acres and the yield number was large,” McNew adds. “We believe that given the range of estimates for 2019/20 corn production the August WASDE can contain surprises. For soybeans the range of production related estimates was much narrower suggesting that a general directional consensus on the direction of the 2019/20 crop.”
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