USDA’s National Agricultural Statistics Service lowered its production estimates for corn, soybeans and cotton, bumping corn down to 13.8 billion bushels and soybeans to 3.63 billion bushels, which each represent 1% declines from the August estimate.

If realized, the NASS estimate for corn would be 4% lower than last year’s production of 14.4 billion bushels. Thursday's report also lowered the estimated yield to 168.2 bushels per acre, down 1.3 bushels from the previous forecast and 8.2 bushels from 2018.

The forecast has soybeans taking a 20% hit from last year’s production of 4.5 billion bushels. Cotton production, on the other hand, is forecast to rise 19%, from about 18.4 million bales to 21.9 million.

NASS estimated planted acreage for corn at 90 million acres, the same figure it projected in the August forecast. “The area harvested for grain is forecast at 82 million acres, unchanged from the previous forecast but up less than 1 percent from 2018,” NASS said in its crop production estimate.

The area harvested for beans is forecast at 75.9 million acres, which is unchanged from the previous forecast but down 14 percent from 2018’s 88.1 million acres.

Released at the same time, USDA’s World Agricultural Supply and Demand Estimates (WASDE) report said less corn is being used for ethanol. NASS lowered its estimate of corn used for ethanol by 25 million bushels from its August estimate of 5.475 billion bushels.

“With use falling more than supply, corn ending stocks are up 9 million bushels from last month,” the WASDE said. “The season-average corn price received by producers is unchanged at $3.60 per bushel.”

For wheat, NASS is projecting production of 53.9 million tons, up from 2018’s figure of nearly 51.3 million tons. Globally, however, the wheat outlook “is for lower supplies, reduced consumption and exports, and higher ending stocks,” the WASDE said. “Supplies are reduced primarily on lower production forecasts for Australia and Kazakhstan on continued dry conditions.”

Though it lowered the corn yield estimate, NASS did not go as low as traders’ projections, said Steve Georgy, president of Allendale Inc. in Illinois. The average trade guess was 166.7 bushels per acre, but “USDA did not recognize that,” he said. Considering the yield estimate and the relatively unchanged  ending stocks projection of 2.19 billion bushels, the report was “bearish” for corn, he said.

“This may be the largest carryout number we get,” he said.

Nevertheless, December corn was trading at $3.65/bushel at 1:45 ET today, up 4 cents from Wednesday’s close. “The market doesn’t believe what USDA just gave us,” Georgy said

The reports were good news for the soybean market, Georgy said, with NASS projecting ending stocks at 640 million, down 115 million bushels from the August estimate and 365 million bushels from the 2018-19 estimate.

Nevertheless, “640 million is still a lot to carry over,” he said. “We don’t have demand yet.”

November soybeans were trading at about $8.90/bushel at 1:45 p.m. ET, up 24 cents from Wednesday’s close.

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