Crop Production Above Norms for Area Farmers

The USDA’s (U.S. Department of Agriculture) World Agriculture Supply and Demand Estimation (or WASDE) report was released on November 10, 2015.

The corn harvest was expected to be the third largest on record at 13.654 billion bushels on an average yield of 169.3 bushels per acre, the second highest ever.

“USDA’s 50-million bushel cut in wheat export was right in line with my forecast”.

The weekly exports of all crops were at the lower end of trade expectations, analysts said, and corn and wheat shipments remained still well below the pace needed to hit the USDA’s forecasts. Soybeans were 95 percent harvested in the 18 major soybean states, ahead of 89 percent last year and 93 percent as the five-year average.

Most of the details from the November report were bearish, although a few of the sentiment might have already been discounted because of the old saying in the futures markets that big crops get bigger (as forecast by USDA’s Natural Agricultural Statistical Service) and small crops get smaller. The Chinese corn carryout is now the largest the country has experienced since the 1999/2000 crop year. Sorghum imports are lowered for China with only a small and partly offsetting increase made for Mexico. Yields are anticipated to average 3,922 pounds per acre, down 1 pound per acre from 2014.

Australian wheat prices have dropped between $10 and $15 dollars a tonne as traders react to news of higher global corn yields and stockpiles, and reduced USA wheat exports. Even with the forecast 3 million tonnes year-on-year increase in feed use in market year 2015-16, ending stocks are also now forecast to rise again. In October, the agency forecast just 1.561 billion. Werling says ending stocks were also raised, but were offset somewhat by strong demand figures.

That task is broad, but he said it means, first, improving on-farm productivity so that wheat is a more attractive crop economically. Harvested area was estimated at 82,429,000 acres, unchanged from October but down slightly from past year.

The November 1 report margin of error averages 100 million bushels for corn and 40 million bushels for soybeans. Ending stocks are now estimated at 911 mb, which is near the high end of pre-report estimates. The economics should favor United States ethanol exports to Brazil by over 20-cents per gallon.

Increases in corn and soybean crop sizes had been expected from the October report but USDA’s numbers topped the average trade forecast for corn and topped all estimates for soybeans.