Market reaction
Ahead of USDA’s reports, corn futures were trading around a nickel lower, soybeans were 13 to 15 cents lower, wheat futures were mostly 3 to 6 cents higher and cotton futures were near unchanged.
In reaction to the reports, corn futures are up 20 to 24 cents, with soybeans up 8 to 11 cents. Winter wheat futures are posting gains ranging from 28 to 32 cents, with spring wheat up 16 to 19 cents. Cotton futures have soared 135 to 215 points. Cotton contracts have hit new contract highs, as have some winter wheat contracts.
Crop production
Corn: 14.750 billion bu.; trade expected 15.004 billion bu.
— compares to 15.165 billion bu. projected in July
Beans: 4.339 billion bu.; trade expected 4.375 billion bu.
— compares to 4.405 billion bu. projected in July
Cotton: 17.264 million bales; trade expected 18.150 million bales
— compares to 17.800 million bales projected in July
All wheat: 1.697 billion bu.; trade expected 1.723 billion bu.
— compares with 1.746 billion bu. in July; 1.826 billion bu. in 2020
All winter wheat: 1.319 billion bu.; trade expected 1.363 billion bu.
— compares with 1.364 billion bu. in July; 1.171 billion bu. in 2020
HRW: 777 million bu.; trade expected 806 million bu.
— compares with 805 million bu. in July; 659 million bu. in 2020
SRW: 366 million bu.; trade expected 363 million bu.
— compares with 362 million bu. in July; 266 million bu. in 2020
White winter: 176 million bu.; trade expected 194 million bu.
— compares with 198 in July; 246 million bu. in 2020
Other spring: 343 million bu.; trade expected 325 million bu.
— compares with 345 million bu. in July; 586.0 million bu. in 2020
Durum: 35 million bu.; trade expected 35 million bu.
— compares with 37 million bu. in July; 68.8 million bu. in 2020
Whoa! USDA’s August crop estimates were a bullish surprise for corn, soybeans, wheat and cotton.
USDA’s first corn crop estimate was 254 million bu. below the average pre-report trade estimate and down 415 million bu. from the July projection. USDA estimates the national average corn yield at 174.6 bu. per acre, down 4.9 bu. from trendline. USDA did not change harvested acres, which are estimated at 84.495 million acres.
USDA estimates record yields in eight states — California, Illinois, Indiana, Michigan, New York, Ohio, Oklahoma and Pennsylvania. In the top 12 production states, USDA estimates the corn yield at 214 bu. per acre in Illinois, 194 bu. in Indiana, 193 bu. in Iowa, 138 bu. in Kansas, 169 bu. in Michigan, 166 bu. in Minnesota, 171 bu. in Missouri, 186 bu. in Nebraska, 106 bu. in North Dakota, 193 bu. in Ohio, 133 bu. in South Dakota and 167 bu. in Wisconsin.
USDA’s initial soybean crop estimate was 36 million bu. below the average pre-report trade estimate and down 66 million bu. from the July projection. USDA estimates the national average soybean yield at 50.0 bu. per acre, 0.8 bu. below trendline. USDA left its harvested acreage estimate at 86.72 million acres.
USDA estimates record soybean yields in nine states — Illinois, Indiana, Maryland, Mississippi, Missouri, New York, Ohio, Pennsylvania and Texas. In the top 13 production states, USDA estimates the soybean yield at 49 bu. per acre in Arkansas, 64 bu. in Illinois, 60 bu. in Indiana, 58 bu. in Iowa, 41 bu. in Kansas, 48 bu. in Michigan, 43 bu. in Minnesota, 50 bu. in Missouri, 60 bu. in Nebraska, 24 bu. in North Dakota, 58 bu. in Ohio, 39 bu. in South Dakota and 49 bu. in Wisconsin.
USDA’s all-wheat crop estimate came in 26 million bu. below the average pre-report estimate and down 49 million bu. from last month. USDA cut the winter wheat crop estimate by 45 million bu. from July. The HRW crop was cut 28 million bu., the SRW estimate was raised 2 million bu. and the white winter wheat crop estimate was lowered 22 million bushels. USDA only trimmed its other spring wheat crop estimate by 2 million bu. from last month, whereas traders expected a 20-million bu. decline. It also trimmed durum production by 2 million bu. from last month. USDA cut its all-wheat yield estimate by 1.3 bu. to 44.5 bu. per acre. USDA trimmed its other spring wheat yield estimate by 0.1 bu. to 30.6 bu. per acre. USDA raised its other spring wheat yield estimate in top producing North Dakota by 2 bu. from last month to 30 bu. per acre.
USDA’s initial cotton crop estimate was 886,000 bales below the average pre-report trade estimate and 536,000 bales lower than the July projection. USDA estimates the cotton yield at 800 lbs., down 47 lbs. per acre from last month’s projection. USDA cut its harvested acreage estimate by 140,000 acres from last month to 10.36 million acres.
USDA estimates the cotton yield at 621 lbs. per acre in Texas and 928 lbs. in Georgia.
U.S. carryover
Corn: 1.117 billion bu. for 2020-21; up from 1.082 billion bu. in July
— 1.242 billion bu. for 2021-22; down from 1.432 billion bu. in July
Beans: 160 million bu. for 2020-21; up from 135 million bu. in July
— 155 million bu. for 2021-22; unchanged from 155 million bu. in July
Wheat: 627 million bu. for 2021-22; down from 665 million bu. in July
Cotton: 3.20 million bales for 2020-21; up from 3.15 million bales in July
— 3.00 million bales for 2021-22; down from 3.3 million bales in July
USDA raised its old-crop corn ending stocks estimate by 35 million bu. from last month. It made no changes on the supply side of the balance sheet. On the demand side, USDA raised food, seed and industrial use by 40 million bu., with 35 million bu. of that increase coming in corn-for-ethanol use. USDA more than offset that change with a 75-million-bu. cut to estimated old-crop exports. USDA left its 2020-21 national on-farm cash price forecast at $4.40.
USDA cut its new-crop corn ending stocks projection by 190 million bu. from last month. It lowered total supply by 380 million bu. as the cut to crop size more than offset the bigger beginning stocks. On the demand side of the balance sheet, USDA cut projected feed and residual use and exports by 100 million bu. each and raised food seed and industrial use by 10 million bushels. USDA now projects the national average on-farm cash price for 2021-22 at $5.75, up 15 cents from last month.
USDA raised its old-crop soybean ending stocks forecast by 25 million bu. from July. USDA cut the old-crop crush estimate by 15 million bu. and exports by 10 million bushels. The national average on-farm cash price for 2020-21 is now forecast at $10.90, down 15 cents from last month.
USDA left its new-crop soybean ending stocks forecast unchanged from last month. It trimmed total supply by 42 million bu., as the smaller crop size more than offset bigger beginning stocks. On the demand side of the balance sheet, USDA cut projected new-crop crush and exports by 20 million bu. each from last month and trimmed residual use by 1 million bushels. USDA kept its 2021-22 national average on-farm cash price forecast at $13.70.
USDA cut projected new-crop wheat carryover by 38 million bu. from last month. It lowered total supply by 49 million bu. amid the smaller crop estimate. On the demand side, USDA cut projected feed and residual use by 10 million bu. and trimmed food use by 1 million bushels. USDA raised its 2021-22 national average on-farm cash price forecast by a dime from last month to $6.70.
USDA raised its old-crop cotton ending stocks figure by 50,000 bales from last month on a like cut to estimated exports. USDA kept its national average on-farm cash price estimate at 66.5 cents.
USDA cut its new-crop cotton ending stocks projection by 300,000 bales from last month. It cut total supply by 480,000 bales as the cut to production more than offset the slightly bigger beginning stocks. On the demand side of the balance sheet, USDA cut projected new-crop cotton exports by 200,000 bales and increased unaccounted use by 20,000 bales. USDA raised its 2021-22 national average on-farm cash cotton price forecast by a nickel from last month to 80 cents.
Global carryover
Corn: 280.75 MMT for 2020-21; up from 279.86 MMT in July
— 284.63 MMT for 2021-22; down from 291.18 MMT in July
Beans: 92.82 MMT for 2020-21; up from 91.49 MMT in July
— 96.15 MMT for 2021-22; up from 94.49 MMT in July
Wheat: 288.83 MMT for 2020-21; down from 290.18 MMT in July
— 279.06 MMT for 2021-22; down from 291.68 MMT in July
Cotton: 91.78 million bales for 2020-21; up from 91.57 million bales in July
— 87.23 million bales for 2021-22; down from 87.74 million bales in July
Global production highlights
Argentina beans: 46.0 MMT for 2020-21; compares with 46.5 MMT in July
— 52.0 MMT for 2021-22; compares with 52.0 MMT in July
Brazil beans: 137.0 MMT for 2020-21; compares with 137.0 MMT in July
— 144.0 MMT for 2021-22; compares with 144.0 MMT in July
Argentina wheat: 17.65 MMT for 2020-21; compares with 17.63 MMT in July
— 20.5 MMT for 2021-22; compares with 20.5 MMT in July
Australia wheat: 33.0 MMT for 2020-21; compares with 33.0 MMT in July
— 30.0 MMT for 2021-22; compares with 28.5 MMT in July
China wheat: 134.25 MMT for 2020-21; compares with 134.25 MMT in July
— 136.0 MMT for 2021-22; compares with 136.0 MMT in July
Canada wheat: 35.18 MMT for 2020-21; compares with 35.18 MMT in July
— 24.0 MMT for 2021-22; compares with 31.5 MMT in July
EU wheat: 125.94 MMT for 2020-21; compares with 125.94 MMT in July
— 138.6 MMT for 2021-22; compares with 138.2 MMT in July
Russia wheat: 85.35 MMT for 2020-21; compares with 85.35 MMT in July
— 72.5 MMT for 2021-22; compares with 85.0 MMT in July
Ukraine wheat: 25.42 MMT for 2020-21; compares with 25.42 MMT in July
— 33.0 MMT for 2021-22; compares with 30.0 MMT in July
China corn: 260.67 MMT for 2020-21; compares with 260.67 MMT in July
— 268.0 MMT for 2021-22; compares with 268.0 MMT in July
Argentina corn: 48.5 MMT for 2020-21; compares with 48.5 MMT in July
— 51.0 MMT for 2021-22; compares with 51.0 MMT in July
Brazil corn: 87.0 MMT for 2020-21; compares with 93.0 MMT in July
— 118.0 MMT for 2021-22; compares with 118.0 MMT in July
Ukraine corn: 30.3 MMT for 2020-21; compares with 30.3 MMT in July
— 39.0 MMT for 2021-22; compares with 37.5 MMT in July
South Africa corn: 17.2 MMT for 2020-21; compares with 17.0 MMT in July
— 17.0 MMT for 2021-22; compares with 17.0 MMT in July
China cotton: 29.5 million bales for 2020-21; compares with 29.5 million bales in July
— 26.75 million bales for 2021-22; compares with 26.75 million bales in July