PF Reaction: Highly Bullish Soybean Numbers

August 10, 2012 04:00 AM
 

** CROP PRODUCTION SUMMARY **

  • CORN: 10.779 billion bu.; trade expected 10.971 billion bu.
      -- compares to 12.358 billion bu. in 2011
  • BEANS: 2.692 billion bu., trade expected 2.786 billion bu.
      -- compares to 3.056 billion bu. in 2011
  • ALL WHEAT: 2.268 billion bu.; trade expected 2.220 billion bu.
      -- compares to 1.999 billion bu. in 2011
  • ALL WINTER WHEAT: 1.683 billion bu.; trade expected 1.665 bil. bu.
      -- compares to 1.494 billion bu. in 2011
  • SPRING WHEAT: 500 million bu.; trade expected 488 million bu.
      -- compares to 455 million bu. in 2011
  • DURUM WHEAT: 86 million bu.; trade expected 84 million bu.
      -- compares to 50.5 million bu. in 2011
  • COTTON: 17.651 million bales; trade expected 16.8 million bales
      -- compares to 15.674 million bales in 2011

 

USDA's first survey-based corn crop estimate came in 192 million bu. below the average, pre-report guess and 1.579 billion bu. lower than the 2011 crop. USDA puts the national average yield at 123.4 bu. per acre. Harvested acres are seen at 87.361 million, down 1.49 million acres from USDA's June Acreage Report. That figure represents 90.6% of planted acres, which is still higher (much higher in some cases) than private estimates. Obviously at this point, USDA has kept more "low" yield estimates in the harvested acreage mix than others.

The state-by-state breakdown of corn yields shows: Illinois at 116 bu.; Indiana, 100 bu.; Iowa, 141 bu.; Kansas, 93 bu.; Minnesota, 155 bu.; Missouri, 75 bu.; Nebraska, 147 bu.; North Dakota, 100 bu.; Ohio, 126 bu.; and South Dakota, 98 bu. per acre.

USDA's first survey-based soybean crop estimate came in 94 million bu. below the average, pre-report trade guess and 364 million bu. less than 2011. USDA puts the national average soybean yield at 36.1 bu. per acre. Harvested acres are seen at 74.635 million, down 680,000 acres from USDA's June Acreage Report.

The state-by-state breakdown of soybean yields shows: Arkansas at 39 bu.; Illinois, 37 bu.; Indiana, 37 bu.; Iowa, 43 bu.; Minnesota, 38 bu.; Missouri, 30 bu.; Nebraska, 43 bu.; Ohio, 42 bu.; and South Dakota, 31 bu. per acre.

USDA's all wheat estimate came in 48 million bu. higher than traders expected. USDA now puts the national average all wheat yield at 46.5 bu. per acre, up 0.9 bu. from last month. The spring wheat yield is estimated at 42.8 bu., up 2.4 bu. from July.

USDA's first survey-based cotton crop estimate came in 851,000 bales higher than traders expected. USDA puts its initial national average cotton yield estimate at 784 lbs., down 6 lbs. per acre from 2011.


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

  • CORN: 1.021 billion bu.; up from July est. of 903 million bu.
      -- compares to 1.128 billion bu. in 2010-11
  • BEANS: 145 million bu.; down from July est. of 170 million bu.
      -- compares to 215 million bu. in 2010-11
  • COTTON: 3.3 million bales; unch from July est. of 3.3 million bales
      -- compares to 2.6 million bales in 2010-11

 

USDA raised its old-crop corn carryover estimate 118 million bu. from last month. On the supply side, 3 million bu. were added to estimated imports. On the demand side, USDA cut food, seed and industrial use 65 million bu., with 50 million bu. of that cut coming from estimated ethanol grind. USDA also cut estimated exports by 50 million bushels. USDA now sees a national average cash price of $6.20 to $6.30, up a dime on the bottom end of the range and steady on the top end.

USDA lowered its old-crop soybean carryover estimate 25 million bu. from last month. Estimated crush was increased 15 million bu. and estimated exports were increased 10 million bushels. USDA now puts the national average cash price at $12.45, up a nickel from July.

USDA left its old-crop cotton carryover estimate unchanged from last month. There were some changes on the demand side, however. USDA increased estimated exports by 110,000 bales and offset that by lowering unaccounted use by a like amount. USDA puts the national average on-farm cash price at 89.5 cents, down 1.5 cents from last month.

 


** 2012-13 U.S. CARRYOVER **

  • CORN: 650 million bu.; down sharply from July proj. of 1.183 billion bu.
  • BEANS: 115 million bu.; down from July proj. of 130 million bu.
  • WHEAT: 698 million bu.; up from July proj. of 664 million bu.
  • COTTON: 5.5 million bales; up from July proj. of 4.8 million bales

 

USDA made major changes to the 2012-13 corn balance sheet, which were necessitated by the dramatic cut to the corn crop from July's projection. On the supply side, USDA slashed 2.028 billion bu. from total supplies as the sharp reduction in production was only partially offset by bigger beginning stocks and increased imports. On the demand side, USDA slashed total use by 1.495 billion bushels. Projected feed and residual use was cut 725 million bu. to 4.075 billion bu., food, seed and industrial use was cut 470 million bu. (400 million bu. of that coming from ethanol) to 5.85 billion bu. and exports were cut 300 million bu. to 1.3 billion bushels. USDA now puts the national average cash price at $7.50 to $8.90, up $2.10 on the bottom end of the range and $2.50 on the top end.

USDA cut 378 million bu. from its 2012-13 total soybean supply projection as lower output and smaller beginning stocks more than offset a modest increase in imports. On the usage side, USDA cut 363 million bu. from projected total use to keep carryover respectable. USDA cut crush by 95 million bu. to 1.515 billion bu., cut exports 260 million bu. to 1.11 billion bu. and cut residual use 8 million bu. to 27 million bushels. USDA now projects a national average cash soybean price of $15.00 to $17.00 -- up $2 on both ends of the range.

USDA raised its 2012-13 wheat carryover projection by 34 million bu. from last month as an increase in supplies more than offset an expected rise in use. On the supply side, the combination of the bigger crop and a 10-million-bu. increase in projected imports raised total supplies by 54 million bushels. That was only partially offset by a 20-million-bu. increase in projected use, with all of that coming in the feed and residual category. USDA now projects a national average on-farm cash price of $7.60 to $9.00 -- up $1.40 on the bottom end of the range and up $1.60 on the top end.

USDA didn't make a lot of categorical changes to the 2012-13 cotton balance sheet, but projected carryover was raised 700,000 bales from last month. On the supply side, the bigger crop pushed up total supplies by 650,000 bales from July. On the demand side, USDA deceased unaccounted use by 50,000 bales. USDA now projects a national average on-farm cash price of 61.0 cents to 79.0 cents, up 1 cent on the bottom of the range and down 1 cent on the top end.

 



** 2011-12 GLOBAL CARRYOVER **
  • CORN: 135.97 MMT; up from July proj. of 129.37 MMT
      -- projection of 123.33 MMT for 2012-13; ??? from 134.09 MMT in July
  • BEANS: 51.94 MMT; down from July proj. of 52.51 MMT
      -- projection of 53.38 MMT for 2012-13; down from 55.66 MMT in July
  • WHEAT: 197.59 MMT; up slightly from July proj. of 197.18 MMT
      -- projection of 177.17 MMT for 2012-13; down from 182.44 MMT in July
  • COTTON: 67.8 mil. bales; up from July proj. of 66.68 mil. bales
      -- projection of 74.67 mil. bales for 2012-13; up from 72.39 mil. bales in July

** 2011-12 GLOBAL PRODUCTION HIGHLIGHTS **

  • ARGENTINA BEANS: 55.0 MMT; compares to 55.0 MMT in July
      -- compares to 41.0 MMT for 2011-12
  • BRAZIL BEANS: 81.0 MMT; compares to 78.0 MMT in July
      -- compares to 65.5 MMT for 2011-12
  • ARGENTINA WHEAT: 11.5 MMT; compares to 12.0 MMT in July
      -- compares to 15.0 MMT for 2011-12
  • AUSTRALIA WHEAT: 26.0 MMT; compares to 26.0 MMT in July
      -- compares to 29.5 MMT for 2011-12
  • CHINA WHEAT: 118.0 MMT; compares to 118.0 MMT in July
      -- compares to 117.92 MMT for 2011-12
  • CANADA WHEAT: 27.0 MMT; compares to 26.6 MMT in July
      -- compares to 25.26 MMT for 2011-12
  • EU-27 WHEAT: 132.9 MMT; compares to 133.14 MMT in July
      -- compares to 137.4 MMT for 2011-12
  • RUSSIA WHEAT: 43.0 MMT; compares to 49.0 MMT in July
      -- compares to 56.23 MMT for 2011-12
  • FSU-12 WHEAT: 82.96 MMT; compares to 88.56 MMT in July
      -- compares to 114.42 MMT for 2011-12
  • CHINA CORN: 200.0 MMT; compares to 195.0 MMT in July
      -- compares to 192.78 MMT for 2011-12
  • ARGENTINA CORN: 28.0 MMT; compares to 25.0 MMT in July
      -- compares to 21.0 MMT for 2011-12
  • SOUTH AFRICA CORN: 13.5 MMT; compares to 13.0 MMT in July
      -- compares to 11.5 MMT for 2011-12
  • BRAZIL CORN: 70.0 MMT; compares to 67.0 MMT in July
      -- compares to 72.8 MMT for 2011-12
  • CHINA COTTON: 31.0 mil. bales; compares to 30.5 mil. bales in July
      -- compares to 33.5 mil. bales for 2011-12

** MARKET REACTION **

Bean futures are trading mostly 9 to 20 cents higher in reaction to USDA's data. Corn futures turned mildly lower after the report data was released and are trading mostly 1 to 3 cents lower. Wheat futures are posting double-digit losses in most contracts at all three exchanges.

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