The Sept. 12 USDA reports created positive news for the corn and soybeans markets. The reports held both good news and bad news, says Jerry Gulke president of the Gulke Group.
USDA’s 2019/20 corn outlook calls for reduced production, lower corn used for ethanol and slightly higher ending stocks. That’s based on corn production for grain forecast at 13.8 billion bushels, down 1% from the previous forecast and down 4% from last year.
Based on conditions as of Sept. 1, yields are expected to average 168.2 bushels per harvested acre, down 1.3 bushels from the previous forecast and down 8.2 bushels from 2018. Area harvested for grain is forecast at 82.0 million acres, unchanged from the previous forecast but up less than 1% from 2018.
USDA’s 2019/20 soybean outlook includes lower soybean production and lower ending stocks. That’s based on soybean production for beans forecast at 3.63 billion bushels, down 1% from the previous forecast and down 20% from last year.
Based on conditions as of Sept. 1, yields are expected to average 47.9 bushels per harvested acre, down 0.6 bushel from the previous forecast and down 3.7 bushels from 2018. Area harvested for beans is forecast at 75.9 million acres, unchanged from the previous forecast but down 14% from 2018.
Following the reports’ release, corn prices were up around 5¢ and soybeans up around 25¢.
“The good news is they didn't increase the carryout from last year as much as they could have,” he says. “And they did keep the carryout for 19/20 about unchanged.”
For these reports, USDA used objective yield and farm operator surveys, which were conducted between Aug. 24 and Sept. 6. The farm operator survey was conducted primarily by telephone with some use of mail, internet and personal interviews with 9,600 producers. These growers will continue to be surveyed throughout the growing season to provide indications of average yields.
“I’m still a little bit confused if they counted the ears or the stalks,” Gulke says. “Did they strip the years back and see little nubbins? Or was it only harvestable cobs?”
Overall, Gulke says the reports were good for the grain markets.
“We've got a report behind it now that didn’t increase production,” he says. “And now the rest is kind of up to China and Trump to give him a little boost. And if you go back to 2009, we had the same kind of scenario. It took all fall into January before we had harvest data from farmers that either prove or disprove that this crop is not near as good as anybody thinks.”