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USDA raises 2018 corn, soybean crop guesses

The USDA has increased its 2018 corn and soybean production estimates.

This year’s corn crop is now projected at 14.230 billion bushels, up 190 million from June, with the USDA raising its acreage numbers while leaving the average yield unchanged at 174 bushels per acre. For acreage, planted area is pegged at 89.1 million acres, up 1.1 million on the month, with harvested area of 81.8 million, also 1.1 million higher.

Soybeans are currently seen at 4.310 billion bushels, a month to month increase of 30 million bushels, also with higher acreage numbers and an unchanged average yield projection of 48.5 bushels per acre. The USDA’s planted area total is 89.6 million acres, 600,000 above June, with harvested area of 88.9 million acres, 700,000 higher.

Corn and soybeans are in very good condition overall, but the projections are highly variable, with several months left until the expected start of harvest.

The USDA also tightened the old and new crop balance sheets for corn, expecting strong feed use, but increased the new crop ending stocks estimate for soybeans mostly because of tariffs.

The USDA’s next set of supply, demand, and production numbers is out August 10th.

Breakdown of selected supply and demand tables:

The 2018/19 U.S. marketing year for wheat started June 1st, while 2017/18 runs through August for corn and soybeans and the end of September for soybean products.

2017/18 U.S. wheat ending stocks were reported at 1.100 billion bushels, compared to 1.080 billion in June and the 2016/17 final of 1.181 billion bushels. The USDA raised imports 2 million bushels to 157 million, putting total supply at 3.079 billion. Seed use was up 1 million bushels on the month to 64 million, while feed & residual use was slashed 20 million bushels at 50 million, for domestic use of 1.077 billion bushels, while exports were 1 million above last month at 901 million, leaving total use at 1.978 billion bushels. The average 2017/18 farm price for wheat is estimated at $4.73 per bushel, compared to $4.75 a month ago and $3.89 a year ago.

2018/19 U.S. wheat ending stocks are pegged at 985 million bushels, compared to 946 million last month. With the USDA raising beginning stocks, or 2017/18 ending stocks, and the production estimate, total supply is seen at 3.117 billion bushels. Feed & and residual use was raised 10 million bushels to 130 million, taking domestic use to 1.157 billion bushels, and exports were hiked 25 million bushels to 975 million, for total use of 2.132 billion bushels. The average 2018/19 farm price is estimated at $4.50 to $5.50 per bushel, compared to $4.60 to $5.60 in June.

2017/18 U.S. corn ending stocks are projected at 2.027 billion bushels, compared to 2.102 billion a month ago and 2.293 billion a year ago. Imports were lowered 5 million bushels to 40 million, taking total supply to 16.937 billion. Feed and residual use was down 50 million bushels on the month at 5.45 billion, while food, seed, & industrial use was 20 million bushels higher at 7.06 billion, and ethanol was increased 25 million bushels to 5.6 billion, for domestic use of 12.51 billion bushels. Exports were hiked 100 million bushels to 2.4 billion, leaving total use at 14.91 billion bushels. The average 2017/18 farm price is estimated at $3.30 to $3.50 per bushel, compared to $3.25 to $3.55 last month and $3.36 last marketing year.

2018/19 U.S. corn ending stocks are seen at 1.552 billion bushels, compared to 1.577 billion in June. With lower beginning stocks against higher production, total supply was up more than 100 million bushels on the month at 16.307 billion. Feed and residual use was increased 75 million bushels to 5.425 billion, while food, seed, & industrial use was cut 60 million bushels to 7.105 million, including a 50-million-bushel reduction in ethanol use, to 5.625 billion; that leaves the current domestic use estimate at 12.530 billion bushels. Exports are now pegged at 2.225 billion bushels, up 125 million, for total use of 14.755 billion bushels. The average 2018/19 farm price is estimated at $3.30 to $4.30 per bushel, compared to $3.40 to $4.40 a month ago.

2017/18 U.S. soybean ending stocks are expected to be 465 million bushels, compared to 505 million last month and 302 million last marketing year. The USDA lowered imports 3 million bushels to 22 million, leaving total supply at 4.715 billion bushels. The crush use guess was up 15 million at 2.03 billion and exports were 20 million bushels higher at 2.085 billion. With a slight increase in seed use, up 1 million bushels to 104 million, that puts total use at 4.251 billion bushels. The average 2017/18 farm price is estimated at $9.35 per bushel, compared to $9.40 in June and $9.47 for 2016/17.

2018/19 U.S. soybean ending stocks are estimated at 580 million bushels, compared to 385 million a month ago. Beginning stocks are tighter, but the USDA raised production, putting total supply at 4.8 billion bushels. Crush use was hiked 45 million bushels to 2.045 billion, but exports were slashed 250 million bushels to 2.04 billion, leaving total use at 4.220 billion bushels. The average 2018/19 farm price is estimated at $8 to $10.50 per bushel, compared to $8.75 to $11.25 last month.

In the new crop global numbers for wheat, the USDA lowered both ending stocks and the production estimate. Higher production estimates for the U.S. and European Union were more than canceled out by reduced expectations for Australia, China, Russia, Ukraine, and the dozen smaller former Soviet states. China continues to hold more than half of the world’s wheat supply.

Old crop world corn ending stocks were a little bit smaller than a month ago, as was the production guess. Brazil’s projection was down 1.5 million tons, while South Africa’s was slightly higher, and China was unchanged. China also holds a significant amount of corn. New crop corn ending stocks were down, while production was up less than 2 million tons. The USDA raised the outlooks for the U.S. and E.U., but lowered expectations for Canada and the dozen smaller former Soviet states.

Old crop global ending stocks for soybeans were raised more than 3.5 million tons to just over 96 million and production was unchanged. USDA raised Brazil 500,000 tons to 119.5 million, with no other reported changes. Exports were up slightly on the month, with an uptick for the U.S. cancelling out a reduction for Argentina. Chinese imports were unchanged at 97 million tons. For new crop beans, ending stocks jumped sharply, mainly on the higher U.S. estimate, and production was up, with increased expectations for the U.S., Argentina, Brazil, and China. Chinese imports were slashed from 103 million tons to 95 million and while the export guess for Brazil was higher, the overall export estimate was lower, largely because of the tariffs on U.S. soybeans.