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USDA raises estimates for corn and soybeans, again


Updated USDA numbers, continued trade negotiations, African Swine Fever and a hurricane captured most of the market headlines last week.

The USDA updated its crop production and demand estimates midday Sept. 12, giving us further insight into what it expects to take place in the year ahead. Prior to the report many traders were anticipating the agency to lower corn yields slightly, while increasing soybean production expectations.

The USDA followed along with pre-report ideas when it came to soybeans but ended up lifting corn yield expectations much higher than anticipated. It expects a 181.3 bushels per-acre corn yield and a 52.8 soybean yield.

Both are above trade expectations but within the range of pre-report estimates for soybeans and actually below some of the higher expectations some had feared prior to the report. If realized, both projections would be record high.

Because of the increases in production we saw projected ending stocks for both commodities creep higher, coming in above the average pre-report trader estimates, as well. It is interesting to note that even with record yields and a solid production outlook, we will still see corn ending stocks fall below last year’s level due to a solid increase in expected demand.

On the soybean side of the equation, ending stocks at 845 million bushels is something many traders and farmers are having a hard time wrapping their minds around. Prior to the global demand explosion, many felt a carryout of around 200 million was more than adequate.

Considering carryout expectations are now more than four times the adequate level, many traders are trying to find a word that accurately describes the obviously more than burdensome situation we see when looking ahead.

Global wheat numbers came in higher than traders were expecting as well, resulting in a push to sell. The higher-than-anticipated numbers came from an increase in Russian production and export expectations.

It is interesting to note the USDA has a bit of a track record in being slow to meet foreign production and demand ideas, so it would not be surprising to see an adjustment higher from the agency, even in the face of many Russian traders and analysts backing off on their production and export expectations. Of course, as with anything else, only time will tell when it comes to what actually takes place in the year ahead.

Even in the face of a burdensome USDA outlook, the soybean market was actually able to hold on to some slight gains into the close on Sept. 12 as news broke that the United States and China would sit down for another round of high-level trade talks.

Many have claimed the administration will do all it can to have the Chinese trade issue solved prior to midterm elections, in an attempt to please the Farm Belt and its constituents. This of course would be positive news for the market and will be watched closely in the weeks ahead.

News also broke late last week that Canada is prepared to compromise when it comes to dairy imports from the U.S., one of the major sticking points in NAFTA negotiations. Many traders met this news with excitement; however, late Thursday, Mexican officials said they are prepared to move forward bilaterally, making many wonder if we are still light-years from a Canadian solution.

While China has had its hands full dealing with the spread of African swine fever, with confirmed cases continuing to spread, the announcement it was discovered in two wild boars in Belgium, near the French border, struck fear into the hearts of many hog producers across the globe.

While the spread of the disease could be a short-term bullish factor for U.S. hog prices, further bolstering export demand, the idea the disease has yet to be contained is concerning, especially considering how many feed products and additives are imported from other countries for use in the U.S. hog population. Producers and traders alike will continue to hold their breath hoping the disease does not make its way into North America.

As we closed the week, traders were monitoring the landfall of Hurricane Florence and its path across the U.S. as a tropical system. As of Friday it appeared the impact would be limited to the Southeast, but be felt across the country.

Looking ahead, we will continue to monitor actual harvest yield results as well as actual cash values across the countryside. Trade discussions will remain of utmost importance as well.


Angie Setzer is the Vice President of Grain for Citizens Elevator in Charlotte, Mich. Her market commentary can be found on Twitter by @GoddessofGrain and online at

The opinions and views in this commentary are solely those of Angie Setzer. Data used for this commentary obtained from various sources are believed to be accurate.