Four major crop reports were released on January 10th by the USDA. More bullish-than-expected data in the corn market came as a surprise to many market analysts after largely bearish predictions prior to the release of the reports. On the whole, the USDA reflected higher than anticipated estimated corn stocks, neutral bean stocks, and bearish wheat stocks.
The four reports—the Annual Crop Production, Grain Stocks, Winter Wheat Seedings, and World Agricultural Supply and Demand Estimates (WASDE)—are highly anticipated, as these reports set the basis for harvested acres from the previous growing season and set the tone for the grain and crop market outlook for the next growing season. The USDA’s monthly and annual reports are considered the most significant factors affecting the grain markets, and even slight changes in the reports’ numbers can have drastic implications on commodity prices and market reactions.
After higher than expected yields for corn and soybeans across most of the Midwest this fall, most analysts were anticipating the USDA to revise its numbers upward in its January report, and were expecting the corn outlook to remain bearish. The USDA’s downward revision of estimated corn bushels per acre combined with a higher demand number resulted in the lower corn stock estimates.
Looking at the numbers, for corn, the USDA estimates the 2013 U.S. average yield at 158.8 bushels per acre, which is down 1.6 bushels from the November forecast, but 35.4 bushels above the 2012 average yield of 123.4. The USDA said 6.38 billion bushels are stored on farm, while 4.05 billion bushels are stored in off-farm locations like grain elevators.
Area harvested for grain is estimated at 87.7 million acres, up slightly from both the November forecast and 2012.
In soybeans, the USDA increased its production estimate, boosting production to 3.289 billion bushels from its previous projection of 3.258 billion bushels. To get there, USDA upped harvested acres to 75.87 million acres from its previous 75.7 million acres estimate and adjusted the national average yield to 43.3 bushels per acre from 43.0 bushels per acre. The USDA set soybean stocks as of December 1 at 2.148 billion bushels, which is slightly smaller than the average pre-report estimate. Additionally, it’s the second-smallest soybean stocks figure since the 2003-04 marketing year. The USDA said 955 million bushels are stored on-farm, while 1.192 billion bushels are in off-farm storage.
In wheat, farmers planted 41.89 million acres of winter wheat this fall, down 3% from 2013, the USDA reported. Winter wheat seedings came in below the range of pre-report expectations. The USDA also reported that hard red winter wheat was planted on 30.1 million acres, which is up 2% from 2013. Soft red winter wheat was planted on 8.44 million acres, down 16% from 2013. White winter wheat was planted on 3.39 million acres, down 3% from last year. The quarterly Grain Stocks report said the U.S. has 1.463 billion bushels of wheat stocks, 399 million bushels stored on farm and 1.064 billion bushels stored off farm. (Micik, Katie. “USDA Reports Summary: USDA Trims Corn Crop.” DTN/The Progressive Farmer, 06 Jan. 2014. Web. 07 Jan. 2014.)
The January USDA numbers often yield unexpected data, and this year’s reports didn’t disappoint. If you’re a landowner looking for assistance managing the complexities of land ownership, please contact UFARM for a free consultation with one of our experienced land managers.