USDA Supply and Demand Report Expectations

In the overnight session the grains were mostly unchanged with corn up 1/4 cent, soybeans up 2 1/1/2 cents and wheat down 1/2 a penny. The dollar is trading a fraction of a percent higher and crude oil has fallen $1.32. This morning there was a reportable new crop sale of 180,000 metric tons of soybeans to unknown destinations.

The latest WASDE report will be released at 11 AM CST today. The August report produced significantly higher yield estimates and ending stocks than the market was looking, especially after the drowned acres and excessive rains damaged the crop in the eastern grain belt. The August surprise sent prices tumbling for the next month, so what is in store for the September report?

The September report is expected to bring slightly lower corn and soybean yield forecasts according to the latest Reuters poll of 20 analysts. The average analyst is guessing that corn yield will be 167.6 bushels per acre compared to 168.8 bushels per acre last month, with ending stocks declining 70 million bushels to 1.643 billion bushels for the 15/16 corn crop. In the latest forecasts from Planalytics, Pro Farmer, Informa and FC Stone three out of the four company's project yield at least two bushels below the August USDA forecast. Planalytics currently sees corn yield at 166.8 BPA, Pro Farmer projects 164.3 BPA, FC Stone forecasts 165.9 BPA. Informa corn yield is currently matching the August USDA expectations. Both Informa and FC Stone increased their yield estimates this month from around 165 bushels per acre last month.

Analysts are also expecting soybean yield to decline but only by a modest .5 bushels per acre to 46.4 BPA. Planalytics, Informa and FC Stone all increased their yield forecasts this month as weather throughout August remained mostly optimal for the oilseed’s development. Ending stocks are expected to decline to 415 million bushels which is still a burdensome carryout.

Global ending stocks are also expected to decline this month with expectations for global corn ending stocks at 193.44 million metric tons compared to 195.09 million metric tons last month. Global soybean ending stocks are expected to fall to 86.21 MMT from 86.88 MMT in August, and Wheat ending stocks are expected to rise this month to 221.90 MMT from 221.47 MMT last month.

Export sales were strong this morning for both old crop and new crop. Old crop corn beat expectations with 411,200 metric tons of sales with analysts anticipating cancelations around 50,000 metric tons. Old crop soybean sales also beat analyst expectations with 1,790,200 metric tons of sales. New crop sales were very strong also with corn booking 1.9 million metric tons and soybeans booking 2.6 million metric tons of sales this week which were well over the range of analyst expectations.

—Cody Bills