Friday afternoon, the U.S. Department of Agriculture (USDA) will release September’s supply and demand forecast (WASDE). The August WASDE Report caught many off guard and was the first indicator that a glut of corn was on the way.
Today’s report differs from the other reports the USDA issues throughout the year. That’s because it’s formed with data collected by folks making their rounds in the fields.
“September is when we first introduced the objective yield survey for corn and soybeans for the season, which means we’ve sent trained enumerators into fields where they’re taking counts and measurements in some isolated cases where maturity is so far along,” said Lance Honig, Crops Branch Chief, USDA-NASS. “Maybe they were or even able to capture some information from the fields physically.”
Honig says he’s well aware of the interest in today’s report, acknowledging the excitement stirred up after the August release (PDF).
The September WASDE report comes out on Friday at Noon ET. As always, we’ll bring you those numbers right here in the Market Day Report.
Bumper Corn Crops, Bummer Corn Prices
Economists with Allendale are expecting changes for both old and new crop corn. They’re expecting the old crop to be adjusted up by around half a percent. For the new crop, they’re preparing the wheat report to show a yield decline by around two bushels per acre, landing at 186 bushels.
They do warn, however, that it usually takes time for the USDA to put yield changes into monthly reports. There could also be adjustments on the soybean side. Allendale is preparing for the USDA to drop last month’s old crop stock estimates from 290 million bushels to 287 million bushels. New crop yield is also expected to see a reduction, losing a few tenths of a percent to 53.2 bushels per acre.
We caught up with Brady Huck at Advance Trading. He’s been watching the trade since the last report and says the markets may be starting to doubt prior corn estimates.
“Going to get some big numbers out there,” Huck explained. “The trade’s looking to see if the USDA will lower their corn yield. A lot of skepticism about that 188.1 [million metric tons] they printed last month. I think the trade with the recovery we’ve seen in the price is probably starting to doubt that number, definitely. And will we see something sub-186? That could surprise the market and maybe provide some sparks for us here.”
CONAB, the Brazilian equivalent of USDA, recently released its corn estimates. They’ve upped Brazil’s old crop corn to just shy of 139 million metric tons, while the August WASDE report showed that crop coming in at 132 million metric tons.
Soybeans and The Trade Deficit Left by China
No matter what the report shows, there will be a lot of soybeans ready to sell here in the U.S., but with China no longer at the purchasing table, it’s made marketing a lot more difficult.
The North Dakota Soybean Growers Association says the dispute with China needs to end. They’re calling on the White House to make a short-term deal to give U.S. growers some relief. The group says American growers need answers right now in terms of buyers, saying other issues can wait to be addressed until after harvest.
Despite the lack of market support for soybeans, growers are preparing to bring that crop in for the year. Sam Hudson with Cornbelt Marketing has been making the rounds with clients recently and tells us farmers are feeling the pain.
“It’s just not a real positive outlook,” Hudson explained. “I mean, even looking forward into next year, you know, if a guy has huge yields this year and we can get to a little bit of, you know, stability and price, you can kind of kick the can and make it to next year. But when you look at fertilizer prices and just everything that goes into it, it’s not just that you think about the shop hours. You know just the sheer cost of nuts and bolts from an inflationary point. They’re fighting it from every single angle. You know, you’ve got to buy your tractor and then pay for the subscription to even use it. All this stuff just continues to start stacking up. “
Ag Secretary Brooke Rollins is hoping to make a dent in the situation over the next few weeks. She’ll travel to Japan after a trade deal was signed last week, worth more than half a trillion dollars. She told us during an exclusive interview that she hopes market action in Japan will help ease the pain of losing China’s business.
