On Oct. 12, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimate (WASDE) report. USDA will not be updating acreages this month, so the focus will be on yield.
Ahead of the report, analysts see the U.S. corn yield falling to 171.8 bu. per acre (the analyst range is 170.1 bu. per acre to 173.9 bu. per acre). In September, USDA pegged the national corn yield at 172.5 bu. per acre. The final yield for 2021/22 was 176.7 bu. per acre.
For soybeans, see the U.S. yield holding steady at 50.5 bu. per acre — the same as USDA’s September estimate (the analyst range is 49.8 bu. per acre to 51.2 bu. per acre). The final yield for 2021/22 was 51.7 bu. per acre.
Pro Farmer says big balance sheet changes are coming, as USDA’s 2022-23 domestic balance sheets will reflect Sept. 1 stocks and the final 2022 wheat crop estimate, along with any changes to this year’s corn and soybean crop forecasts. That will produce some major adjustments to the supply and demand sides of the corn, soybean and wheat balance sheets.
We welcome John Payne back to AgriTalk. He’s now with Hedge Point Global and he joins us to discuss headline-driven markets, macro issues, demand and USDA reports. Plus Jack Scoville of Price Futures Group shares price action perspective and Cary Artac of Artac Advisory has chart updates for December corn, November soybeans, and November feeder cattle.
Be ready for a marketing-moving report, says Jerry Gulke, president of Gulke Group.
“As usual, it won’t be so much what the data says but how the market reacts to it,” he says. “The underlying feeling is the corn yield could come down a little bit. If it does come down a half to I bu., what will the government do with less production? We’ve gotten some hints over the past reports that they have a tendency to want to curb demand, whether it’s a little bit in the feed, a little bit of ethanol and more so in the exports.”
So, Gulke says, this would give USDA a chance for the government to curb production a little bit. But how much will they cut the demand side to keep the table in balance?
“We’re really way behind in our corn sales for this time of the year,” he says. “This is the time of the year where we should be shipping a lot of beans and corn. But we have barges backed up like crazy due to the low water levels. While we’re losing that export potential, somebody else is taking it.”
For Wednesday’s report, Gulke says USDA could deliver a double whammy for farmers. That is if they increase the corn yield and decrease exports.
“We don’t want to see an increase in carryout stocks, no matter how they come about doing it, especially if they do it by reducing demand,” he says. “If they have to reduce demand, regardless of what the yield is, and the carryover goes higher for next year then you’ve taken a lot of pressure off these markets as far as needing a higher price.”
Gulke says the ideal situation would be for USDA to drop both the corn and soybean national average yields by a little bit.
“We don’t want to see an increase in yield, which would create longer-term problems for both grains,” he says.
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