Update on USDA's Grain Stocks Report and Brazilian Corn Supplies & Weather Outlook
Update for October 1st, 2021
Yesterday’s report announcing USDA’s September 1 grain stocks estimate sent prices lower for corn and soybeans. Corn stocks were found to be 81 million bushels higher than analysts had expected putting the final count at 1.236 billion bushels. Which means current estimated corn stocks are 35.6% lower than levels just 1 year ago. Adjustments were also made to the 2020 corn production numbers. Overall corn production was reduced by 71.0 million bushels, planted acres were revised to 90.7 million acres and acres harvested for grain was also adjusted to 82.3 million acres. The 2020 corn yield was lowered from the previous estimate by 0.6 bushel down to 171.4 bushels per acre.
Soybean stocks were also higher. The new estimate came in at 256 million bushels some 81 million bushels higher than expected but current stocks are 50% less than what was on hand just 1 year ago. 2020 soybean production was adjusted higher by 80.8 million bushels, acres planted was revised to 83.4 million acres and harvested acres were adjusted to 82.6 million acres. The soybean yield was moved higher from the previous estimate by 0.8 bushel to 51.0 bushels per acre.
The price of corn in Brazil has sky-rocked up more than 150% and soybeans more than 130% since January 2019. In an effort to help the countries struggling livestock industry the government has suspended the collection of federal taxes on corn imports from outside of their normal trading block to reduce the overall costs of imports by over 9%. This suspension began yesterday and will continue through the end of the year. The Brazilian government instructed the country’s grain agency to begin auctioning supplies to ensure livestock producers have an adequate supply to meet their needs. (AgriCensus)
Brazil planting progress continues with an estimated 30% of the countries first corn crop now planted while soybean planting is just starting. The forecast has improved for key corn and soybean growing regions in southern Brazil. This area is expecting a significant rain over the next week while central and northern areas will remain very dry. The maps below help explain where key areas are for each crop, the expected rainfall amounts along with a soil moisture drought map of Brazil.
African Swine Fever has wiped out hog herds in many countries around the world. The latest outbreaks in Haiti and the Dominican Republic have caused great alarm that it could now more easily spread to the U.S. As a result, the USDA has pledged $500 million in funds to finance efforts here in the U.S. to expand and coordinate monitoring and surveillance for the disease. A consultant with the National Pork Producers Council said, “This is unprecedented both in terms of the amount dedicated to one animal disease and of getting the funds upfront, before we have the disease in the U.S.” Yesterday we learned that there is a newly developed vaccine that is showing promise in the prevention of the disease. The vaccine has been tested on European and Asian swine and has shown to be effective in protecting the animals against the current circulating Asian strain of the virus.
Expected rainfall totals through next Friday.
The GFS and EURO weather models are included below. For reference the EURO model has proven to be more accurate than the GFS especially in recent weeks.