CORN: 10.727 billion bu.; trade expected 10.403 billion bu.
-- compares to 10.779 billion bu. in Aug.; 12.358 billion bu. in 2011
BEANS: 2.634 billion bu., trade expected 2.638 billion bu.
-- compares to 2.692 billion bu. in Aug.; 3.056 billion bu. in 2011
COTTON: 17.109 million bales; trade expected 17.4 million bales
-- compares to 17.651 million bales in Aug.; 15.674 million bales in 2011
USDA now puts the national average corn yield at 122.8 bu. per acre, down 0.6 bu. from the August estimate. Harvested acres are unchanged at 87.361 million. As we've warned, USDA likely "caught" a lot of the yield damage in the August Crop Production Report due to the advanced maturity of the crop which contributed to a very light estimate of average ear weights. However, what many crop watchers will likely have "a problem" with is the harvested acreage estimate is unchanged from August. We are very confident there will be adjustments to the harvested acreage tally (and potentially to the planted acreage tally) in the October Crop Production Report.
Looking at the state-by-state survey results for corn, USDA dropped estimated yields in Illinois (down 6 bu., to 110 bu. per acre), Iowa (down 1 bu., to 140 bu.), Kansas (down 2 bu., to 91 bu.), Nebraska (down 2 bu., to 145 bu.), South Dakota (down 2 bu., to 96 bu.) and Wisconsin (down 2 bu., to 130 bu. per acre). Yields were unchanged from August in Indiana (100 bu. per acre), Michigan (114 bu.), Missouri (75 bu.) and Ohio (126 bu. per acre). Yield increases from August were reported in Kentucky (up 5 bu., to 70 bu. per acre), Minnesota (up 1 bu., to 156 bu.) and North Dakota (up 5 bu., to 105 bu. per acre).
The national average soybean yield is now estimated at 35.3 bu. per acre, down 0.8 bu. from the August estimate. USDA also left the harvested bean acreage estimate unchanged from August at 74.635 million.
Looking at the state-by-state survey results for soybeans, USDA did not increase yields in any of the key states from August. Yields were held steady in Arkansas (39 bu. per acre), Illinois (37 bu.), Indiana (37 bu.) and Minnesota (38 bu. per acre). Yields are down from the August estimate in Iowa (down 4 bu., to 39 bu. per acre), Missouri (down 2 bu., to 28 bu.), Nebraska (down 3 bu., to 40 bu.), Ohio (down 2 bu., to 40 bu.) and S. Dakota (down 3 bu., to 28 bu. per acre).
USDA now puts the national average cotton yield at 786 lbs. per acre, up 2 lbs. from the August estimate. Harvested acreage was cut 367,000 acres from August, to 10.443 million. USDA also adjusted its cotton plantings estimate down 275,000 from the June Acreage Report. USDA now puts planted cotton acres at 12.360 million.
2011-12 U.S. CARRYOVER
CORN: 1.181 billion bu.; up from Aug. est. of 1.021 billion bu.
-- compares to 1.128 billion bu. in 2010-11
BEANS: 130 million bu.; down from Aug. est. of 145 million bu.
-- compares to 215 million bu. in 2010-11
COTTON: 3.35 million bales; up from Aug. est. of 3.3 million bales
-- compares to 2.6 million bales in 2010-11
The 160-million-acre increase in estimated old-crop carryover should remove some of the risk of a "September Surprise" at the end of the month when USDA delivers the Quarterly Grain Stocks Report. Despite no changes to the supply side of the old-crop balance sheet, USDA hammered use another 160 million bu. from August. Feed & Residual use was cut 150 million bu., to 4.4 billion bushels. The cut could be entirely from the residual component of the category. USDA says, "Feed & Residual use for 2011-12 is lowered 150 million bu. based on the record level of crop maturity and harvest progress as of September 1." That means 2012-crop corn has "moved back in time" to displace use of 2011-crop corn in the old-crop marketing year. How USDA adjusts for this in the 2012-13 marketing year is still an unknown to the market. USDA also cut estimated old-crop corn exports 10 million bu., to 1.54 billion bushels. USDA now puts the national average on-farm cash price at $6.25, which is in the middle of the August range estimate.
Old-crop soybean carryover was cut 15 million bu. from August. Total supplies were increased 1 million bu., the result of an increase in estimated 2011-12 marketing year imports. On the demand side, USDA increased estimated crush 15 million bu., to 1.705 billion bushels. Old-crop soybean exports were also increased 10 million bu., to 1.36 billion bushels. To partially offset the "real" demand increase, USDA cut estimated residual "use" 10 million bu., to 3 million bushels. USDA now puts the national average on-farm cash soybean price at $12.45, unchanged from August.
Old-crop cotton carryover is up 50,000 bales from last month. USDA cut "unaccounted use" 50,000 bales. That makes for a "bigger negative" use in the category of -170,000 bales. USDA now puts the national average on-farm cash cotton price at 88.5 cents, down a penny from last month.
2012-13 U.S. CARRYOVER
CORN: 733 million bu.; up from Aug. proj. of 650 million bu.
BEANS: 115 million bu.; unch from Aug. proj. of 115 million bu.
WHEAT: 698 million bu.; unch from Aug. proj. of 698 million bu.
COTTON: 5.3 million bales; down from Aug. proj. of 5.5 million bales
New-crop corn carryover is up 83 million bu. from August. On the supply side of the balance sheet, USDA's bigger old-crop carryover (new-crop beginning stocks) was increased 160 million bu., which more than offset the 52-million-bu. cut to the 2012 corn crop estimate. That increased total supplies 108 million bu. from August.
On the demand side, USDA increased estimated Feed & Residual use 75 million bu., to 4.15 billion bushels. USDA says, "Feed & Residual disappearance is projected 75 million bu. higher, in part reflecting higher expected Sept.-Dec. disappearance with the expected rise in early new-crop usage during the 2011-12 marketing year." USDA also cut estimated new-crop corn exports 50 million bu., to 1.25 billion bushels. USDA now puts the national average on-farm cash price for 2012-13 at $7.20 to $8.60. down 30 cents on both ends of the range from last month.
New-crop soybean carryover is unchanged from last month despite a 72-million-bu. cut to estimated total supplies. The drop in total supplies is the result of a 15-million-bu. cut in beginning stocks and a 58-million-bu. drop in the crop estimate. Cuts to use completely offset the lower supplies with crush down 15 million bu. (1.5 billion bu.), exports down 55 million bu. (1.055 billion bu.) and residual "use" down 2 million bu., (25 million bushels). USDA now puts the national average on-farm cash soybean price at $15 to $17, unchanged from August.
Wheat carryover is unchanged from August. USDA made no changes from last month on the supply or demand side of the balance sheet. USDA now puts the national average on-farm cash wheat price at $7.50 to $8.70, down a dime on the bottom end of the range and down 30 cents on the top end of the range from last month.
USDA cut estimated new-crop cotton carryover 200,000 bales. Total supplies were cut 500,000 bales from August, the result of 540,000-bale cut to estimated production. On the demand side, USDA cut estimated exports 300,000 bales, to 11.8 million bales. USDA now puts the national average on-farm cash cotton price at 62 cents to 78 cents, up a penny on the bottom end of the range and down a penny on the top end from last month.
2011-12 GLOBAL CARRYOVER
CORN: 139.6 MMT; up from Aug. proj. of 135.97 MMT
-- projection of 123.95 MMT for 2012-13; up from Aug. proj. of 123.33 MMT
BEANS: 53.65 MMT; up from Aug. proj. of 51.94 MMT
-- projection of 53.1 MMT for 2012-13; down from Aug. proj. of 53.38 MMT
WHEAT: 198.64 MMT; up from Aug. proj. of 197.59 MMT
-- projection of 176.71 MMT for 2012-13; down from Aug. proj. of 177.17 MMT
COTTON: 69.88 mil. bales; up from Aug. proj. of 67.8 mil. bales
-- projection of 76.52 mil. bales for 2012-13; up from Aug. proj. of 74.67 mil. bales
2012-13 GLOBAL PRODUCTION HIGHLIGHTS
ARGENTINA BEANS: 55.0 MMT; compares to 55.0 MMT in August
-- compares to 41.0 MMT for 2011-12
BRAZIL BEANS: 81.0 MMT; compares to 81.0 MMT in August
-- compares to 66.5 MMT for 2011-12
ARGENTINA WHEAT: 11.5 MMT; compares to 11.5 MMT in August
-- compares to 15.0 MMT for 2011-12
AUSTRALIA WHEAT: 26.0 MMT; compares to 26.0 MMT in August
-- compares to 29.5 MMT for 2011-12
CHINA WHEAT: 118.0 MMT; compares to 118.0 MMT in August
-- compares to 117.92 MMT for 2011-12
CANADA WHEAT: 27.0 MMT; compares to 27.0 MMT in August
-- compares to 25.26 MMT for 2011-12
EU-27 WHEAT: 132.37 MMT; compares to 132.9 MMT in August
-- compares to 137.4 MMT for 2011-12
RUSSIA WHEAT: 39.0 MMT; compares to 43.0 MMT in August
-- compares to 56.23 MMT for 2011-12
FSU-12 WHEAT: 78.96 MMT; compares to 82.96 MMT in August
-- compares to 114.42 MMT for 2011-12
CHINA CORN: 200.0 MMT; compares to 200.0 MMT in August
-- compares to 192.78 MMT for 2011-12
ARGENTINA CORN: 28.0 MMT; compares to 28.0 MMT in August
-- compares to 21.0 MMT for 2011-12
SOUTH AFRICA CORN: 13.5 MMT; compares to 13.5 MMT in August
-- compares to 11.5 MMT for 2011-12
BRAZIL CORN: 70.0 MMT; compares to 70.0 MMT in August
-- compares to 72.73 MMT for 2011-12
CHINA COTTON: 31.0 mil. bales; compares to 31.0 mil. bales in August
-- compares to 33.5 mil. bales for 2011-12
Corn futures responded with an immediate rally, followed by a sharp selloff... and then recovered back to trade just under pre-report levels. December corn futures are currently trading down 8 3/4 cents at $7.69. The craziness in the bean market was even more extreme with a very sharp rally followed by an even deeper retracement before a recovery to trade just above pre-report levels. In the 10 minutes following the release of the report, November soybean futures posted a 35-cent range and are currently trading up 13 1/2 cents at $17.15. December Chicago wheat futures dropped sharply on the release of the extremely neutral report and have recovered to trade just under pre-report levels and down 6 cents at $8.77 3/4.