USDA maintained corn and soybean yields and raised old crop ending stocks in Friday’s World Agricultural Supply and Demand Estimates report.
Department of Agriculture officials kept corn yields at 178.5 bushels per acre, unchanged from June. USDA increased 2019/20 corn ending stocks from 2.10 billion bushels in June to 2.24 billion this month.
The July report is the first to incorporate the new acreage estimates out of the June Acreage report.
John Newton, chief economist at American Farm Bureau Federation told Agri-Pulse that was evident in the outlook for corn and soybeans.
“That helped to pull down new crop production of corn and lifted new crop production of soybeans.” However, he said overall the lower production helped to pull the inventories down slightly and lift the corn price.
Newton said the new crop price of corn is now projected at $3.35 per bushel, up $.15 from last month.
New crop corn ending stocks are projected at 2.64 billion bushels, which is 680 million bushels less than June’s estimate of 3.32 billion. The average trade guess was 2.73 billion bushels.
Allendale Inc. President Steve Georgy says traders did not have much to digest with this report in terms of corn exports sales.
“We are still behind as far as export sales, even with this big sale to China, but we’re still behind about 7% so to go ahead to start adjusting numbers there – they really didn’t,” Georgy told Agri-Pulse.
USDA on Friday reported a sale of 1.3 million metric tons of corn to China. About 765,000 metric tons are for delivery in the current marketing year, with the remaining 600,000 tons scheduled for the new marketing year beginning in September.
The report also came as President Donald Trump cast doubt on more trade talks with China. Speaking to reporters Friday aboard Air Force One, Trump criticized China's handling of the coronavirus pandemic and said it has "severely damaged" the relationship between the two countries.
"I don't think about it now," Trump said of phase two talks. "Honestly, I have many other things in mind."
The "phase one" agreement included about $40 billion in annual Chinese purchases of American ag products.
Georgy said adjustments to soybeans was the bigger surprise for the market as officials raised old crop soybean carryout by 35 million bushels.
The report estimates old-crop soybean ending stocks at 620 million bushels which is higher than last month’s estimate of 585 million. The 585 million was also the average trade guess.
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New crop ending stocks are projected at 425 million bushels which is one million bushels higher than the average trade guess and 30 million bushels higher than June’s estimate. USDA also kept soybean yields at 49.8 bushels per acre.
At midday, Georgy said the corn and soybean markets were trending lower mainly due to weather concerns going into pollination, but the wheat complex saw a slight rally after being surprised by USDA cutting 2019/20 ending stocks.
USDA projects old crop wheat ending stocks at 1.044 billion bushels compared to 2018/19 ending stocks of 1.08 billion bushels.
Georgy and Newton said markets are now turning their attention to weather forecasts as the corn and soybean crops begin to grow.
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