USDA Report Summary

Aug 05, 2019
Nick Michel | Grain Division Manager


Nearly everyone following the USDA report was caught off guard when the numbers were released at noon EST on Monday August 12, 2019. Going into the report, trade expectations were that Acres/Yield/Carryout would be decreased modestly from the July numbers. While we did see a reduction in planted acreage estimates, it was still 2 million acres above expectations. Yield actually increased 3.5 bu/acre to 169.5. Expectations going into the report was for the carryout to drop nearly 400 million bushels, but in the end the report forecasted a gain of nearly 200 million bushels in the carryout number from the July Report – a 600 million bushel surprise to the market.

The result was that the market was limit down (-25c) on Monday, and saw follow through selling on Tuesday and Wednesday. At the end of the day Wednesday, September corn futures had lost 52 cents/bu since Friday’s close. This price drop in response to the August 12th USDA have us at levels seen since mid-May. There is major support for the market just 5c below Wednesday close, and the hope is that the May lows can hold and the market can at least stabilize.

Adding to uncertainty in the market, the same day that the USDA report was released, the FSA announced prevent plant acres at 11.2 million acres.

While few people have been focused on the soybean balance sheet, bean acres were taken down from 80.0 million to 76.7 million acres. Bean yield was unchanged at 48.5 bu/ac, and the carryout was reduced 40 million bushels to 755 million bushels. With the bean crop being planted substantially later this year, these adjustments will add a heighten response to any talk of an early frost or downward yield adjustments in the future.

USDA                     JULY NUMBERS

Corn

Planted Acres:   91.7       Million Acres

Yield:                     166.0     Bu/Acre

Carryout:             2.0          Billion Bushels
 

TRADE EXPECTIONS for August Report

Planted Acres:   88.0        Million Acres

Yield:                     164.9     Bu/Acre

Carryout:             1.620     Billion Bushels
 

ACTAUL NUMBERS          USDA August Report

Planted Acres:   90.0        Million Acres

Yield:                     169.5     Bu/Acre

Ending Stocks:   2.181     Billion Bushels                  
Summary = nearly 600 bushels above expectations