CORN: 10.706 billion bu.; trade expected 10.598 billion bu.
-- compares to 10.727 billion bu. in Sept.; 12.358 billion bu. in 2011
BEANS: 2.86 billion bu., trade expected 2.770 billion bu.
-- compares to 2.634 billion bu. in Sept.; 3.056 billion bu. in 2011
COTTON: 17.287 million bales; trade expected 17.0 million bales
-- compares to 17.109 million bales in Sept.; 15.674 million bales in 2011
USDA now estimates the national average corn yield at 122 bu. per acre, which is down 0.8 bu. from the September Crop Production Report. The smaller yield estimate was nearly offset by a 360,000-acre increase in harvested area (the result of a 541,000-acre increase in planted area). There may still be some downside left in the crop estimate as USDA's yield estimate is still 1.75 bu. above our August estimate, but USDA enumerators should have had the data to deliver a near-final yield estimate in this update.
Looking at the state-by-state yields on corn, USDA left yields unchanged from September in: Indiana (100 bu. per acre); Iowa (140 bu.); Kansas (91 bu.); and Missouri (75 bu. per acre). Yield increases from September were recorded in: Minnesota (up 12 bu., to 168 bu. per acre); Michigan (up 4 bu., to 118 bu.); and North Dakota (up 10 bu., to 115 bu. per acre). Yield declines from September were recorded in: Illinois (down 12 bu., to 98 bu. per acre); Nebraska (down 3 bu., to 142 bu.); Ohio (down 3 bu., to 123 bu.); S. Dakota (down 2 bu., to 94 bu.); and Wisconsin (down 3 bu., to 127 bu. per acre).
All the talk about "better-than-expected" soybean yields must have been right with USDA now estimating the national average soybean yield at 37.8 bu. per acre. That's up an impressive 2.5 bu. per acre from the September estimate. We're not exactly sure where all these beans are coming from. Our pod counts during the Crop Tour were down sharply from year-ago and USDA's data in September showed similar reductions in pod counts from year-ago. The big unknown was pod weight, which USDA estimated at a very low level in September. The bulk of the bean crop did not get much late-season water, but it got enough to either add some pods or add some seed size... and it probably did both.
USDA increased estimated harvested soybean acres 1.058 million from September, adding even more to the crop size. The increase in harvested acres is the result of a 1.123-million-acre increase in 2012 planted acres.
Looking at the state-by-state yields on soybeans, USDA increased yields in most major bean-growing states: Illinois (up 2 bu., to 39 bu. per acre); Indiana (up 4 bu., to 41 bu.); Iowa (up 4 bu., to 43 bu.); Minnesota (up 5 bu., to 43 bu.); Missouri (up 2 bu., to 30 bu. per acre); Nebraska (up 1 bu., to 41 bu.); and Ohio (up 3 bu., to 43 bu. per acre). Yields were steady with September's estimates in Arkansas (39 bu.) and South Dakota (28 bu. per acre).
USDA now puts the national average cotton yield at 795 lbs. per acre, up 9 lbs. from September. USDA left harvested area unchanged from September at 10.443 million acres.
2012-13 U.S. CARRYOVER
CORN: 619 million bu.; down from Sept. proj. of 733 million bu.
-- compares to 988 million bu. in 2011-12
BEANS: 130 million bu.; up from Sept. proj. of 115 million bu.
-- compares to 169 million bu. in 2011-12
WHEAT: 654 million bu.; down from Sept. proj. of 698 million bu.
-- compares to 743 million bu. in 2011-12
COTTON: 5.6 million bales; up from Sept. proj. of 5.3 million bales
-- compares to 3.35 million bales in 2011-12
The bigger-than-expected corn crop estimate from USDA was completely offset by a 193-million-bu. cut in beginning stocks from the September Supply & Demand (S&D) Report (the result of Sept. 1 corn stocks estimate of 988 million bushels). On old-crop, USDA increased total demand by 196 million bu. (with 162 million of that increase in feed & residual) and increased imports by 3 million bushels.
Total 2012-13 corn supplies are down 214 million bu. from last month. That was only partially offset by a 100-million-bu. cut in projected new-crop corn exports (to 1.15 billion bushels). The result was the 114-million-bu. drop in projected 2012-13 corn carryover from September. USDA now puts the national average on-farm cash price at $7.10 to $8.50, down a dime on both ends of the range.
Despite a 265-million-bu. increase in total soybean supplies, the 2012-13 soybean carryover estimate was increased just 15 million bu. from September. On the demand side, USDA increased estimated exports 210 million bu. (to 1.265 billion bu.) and increased estimated crush 40 million bu. (to 1.54 billion bushels). USDA now puts the national average on-farm cash soybean price at $14.25 to $16.25, down 75 cents on both ends of the range from September.
Estimated wheat carryover was cut 44 million bu. from September. Total supply was unchanged from the September S&D Report. On the demand side, USDA increased estimated feed & residual use 95 million bu. (to 315 million bu.) and cut estimated exports 50 million bu. (to 1.15 billion bushels). USDA now puts the national average on-farm cash wheat price at $7.65 to $8.55, up 15 cents on the bottom and down 15 cents on the top end of the range from September.
Total cotton supplies are up 180,000 bales from September. On the demand side, USDA cut estimated exports 200,000 bales from September (to 11.6 million bales) and increased unaccounted use 80,000 bales. The result was the 300,000-bale increase in estimated 2012-13 cotton carryover. USDA now puts the national average on-farm cash cotton price at 62 cents to 74 cents, unchanged on the bottom end and down 4 cents on the top end of the range from last month.
2012-13 GLOBAL CARRYOVER
CORN: 117.27 MMT; down sharply from Sept. proj. of 123.95 MMT
-- compares to 131.54 MMT in 2011-12
BEANS: 57.56 MMT; up sharply from Sept. proj. of 53.1 MMT
-- compares to 54.79 MMT in 2011-12
WHEAT: 173.0 MMT; down from Sept. proj. of 176.71 MMT
-- compares to 198.17 MMT in 2011-12
COTTON: 79.11 mil. bales; up from Sept. proj. of 76.52 mil. bales
-- compares to 69.56 mil. bales in 2011-12
2012-13 GLOBAL PRODUCTION HIGHLIGHTS
ARGENTINA BEANS: 55.0 MMT; compares to 55.0 MMT in September
-- compares to 41.0 MMT for 2011-12
BRAZIL BEANS: 81.0 MMT; compares to 81.0 MMT in September
-- compares to 66.5 MMT for 2011-12
ARGENTINA WHEAT: 11.5 MMT; compares to 11.5 MMT in September
-- compares to 15.5 MMT for 2011-12
AUSTRALIA WHEAT: 23.0 MMT; compares to 26.0 MMT in September
-- compares to 29.52 MMT for 2011-12
CHINA WHEAT: 118.0 MMT; compares to 118.0 MMT in September
-- compares to 117.92 MMT for 2011-12
CANADA WHEAT: 26.7 MMT; compares to 27.0 MMT in September
-- compares to 25.26 MMT for 2011-12
EU-27 WHEAT: 131.58 MMT; compares to 132.37 MMT in September
-- compares to 137.37 MMT for 2011-12
RUSSIA WHEAT: 38.0 MMT; compares to 39.0 MMT in September
-- compares to 56.23 MMT for 2011-12
FSU-12 WHEAT: 77.71 MMT; compares to 78.96 MMT in September
-- compares to 114.42 MMT for 2011-12
CHINA CORN: 200.0 MMT; compares to 200.0 MMT in September
-- compares to 192.78 MMT for 2011-12
ARGENTINA CORN: 28.0 MMT; compares to 28.0 MMT in September
-- compares to 21.0 MMT for 2011-12
SOUTH AFRICA CORN: 13.5 MMT; compares to 13.5 MMT in September
-- compares to 11.5 MMT for 2011-12
BRAZIL CORN: 70.0 MMT; compares to 70.0 MMT in September
-- compares to 72.73 MMT for 2011-12
CHINA COTTON: 31.5 mil. bales; compares to 31.0 mil. bales in September
-- compares to 33.10 mil. bales for 2011-12
Immediately following the report, corn futures rallied sharply from pre-report levels and are now trading nearly 30 cents higher on the day. Soybean futures followed a similar trend and are now just slightly more than 30 cents higher in most contracts. Wheat futures are following the other grains this morning and are mostly 10 to 15 cents higher.