Chip Flory Dissects the Aug. 12 USDA Reports

02:21PM Aug 12, 2019
USDA NASS Lock Up Area
Heading into the Aug. 12 USDA reports, most analysts and farmers predicted a surprise or two. Today's reports did not disappoint.
( AgWeb )

Heading into the Aug. 12 USDA reports, most analysts and farmers predicted a surprise or two. This monthly round of Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports did not disappoint.

Here’s an overview:

  • Corn: Production forecast at 13.9 billion bushels. National average yield is pegged at 169.5 bushels per acre. Harvested acres are forecast at 82.0 million acres, while planted acres sits at 90 million. The season-average corn price received by producers is lowered 10¢ to $3.60 per bushel.
  • Soybeans: Production is forecast at 3.68 billion bushels. The national average yield is expected to be 48.5 bushels per acre. Harvested acres are forecast at 75.9 million acres, with planted acres sitting at 76.7 million. The U.S. season-average soybean price for 2019/20 is forecast at $8.40 per bushel.

“It seems like the increase in the corn crop estimate, while it came in way, way, way above trade expectations, the crop was only increased 26 million bushels from last month,” Chip Flory, AgriTalk Host and Farm Journal Economist, told AgDay Host Clinton Griffiths immediately following the report’s release.

The Reuters pre-survey poll of analysts called for a corn planted acres at 88 million acres and harvested acres at 80 million. Corn yields were predicted to be 164.9 bu. per acre. For soybeans, the average estimate for planted acres was 81 million acres. Harvested acres were predicted to be 79.9 million acres, and soybean yields were predicted to be 47.6 bu. per acre.

Flory says the 26-million-bushel increase in corn should have been manageable. “But when you offset it with even more dramatic cuts on the demand side of things, you end up with a 170-million-bushel increase in carryover stocks.”

 

Another important dataset was released on Aug. 12: the 2019 prevent plant estimates. USDA’s Farm Service Agency (FSA) reports the total prevent plant acres for 2019 sits at 19 million acres. Of that, 11.2 million are corn and 4.3 million are soybeans. 

“Keep in mind that 11.2 million number can only get bigger,” Flory notes. 

Obviously, the U.S. corn and soybean crops still have a long way to go, Flory says, which makes analyzing these numbers even more difficult. 

“When you plant a crop on June 10, instead of April 10, you started behind the eight ball,” he says. “And we did that on about 40% of the corn acres out there. It's shocking the farmer survey generated the results that it did. I thought the late planning dates would have probably skewed the numbers down.”

Looking at the demand side, Flory notes, USDA cut 100 million bushels from estimated exports from last month for the 2019-20 marketing year. 

“And they from cut 100 million bushels from the bean export forecast, too,” he says. “I think that's probably got something to do with African Swine Fever, but it's also the trade issues that are ongoing and overdue for a resolution. The World Ag Outlook Board is starting to recognize that and starting to chip away at the total demand.”

Next week kicks off the 2019 Pro Farmer Midwest Crop Tour. Flory, Griffiths and others form the Farm Journal team will be doing in-field surveys of the U.S. corn and soybean crops. Learn more and read pre-report coverage at www.agweb.com/profarmer-midwest-crop-tour.

 

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Chip Flory Live Analysis of Crop Production and WASDE

USDA: Corn, Soybean Production Down From 2018

Clinton and Chip Flory USDA Report Analysis