USDA Report Summary, Florence and Soybean Market Outlook
Update for September 13th, 2018
USDA unexpectedly increased their projected corn yield to a new record 181.3 bushels per acre an increase of 2.9 bushels from the August report. This adds an additional +241 million bushels to the total production which now is forecast to reach 14.827 billion bushels. The good news is that demand continues to remain strong and is growing. Exports as well as Feed and Residual were each raised by +50 million bushels and ethanol usage was increased by +25 million bushels. Total ending stocks were increased by +90 million bushels to 1.774 billion bushels. The season-average price to producers is projected to fall by a dime with a midpoint of $3.50 a bushel.
Soybeans also saw an increase in the expected average national yield from 51.6 bushels per acre last month to 52.8 now in the September report. This added an additional 107 million bushels to total production. Soybean exports were left unchanged while domestic crush demand was increased by +10 million bushels. Total ending stocks were increased by +60 million bushels from 785 million bushels to an incredibly high 845 million bushels. The 2018/19 season-average soybean price is expected to range between $7.35 and $9.85 per bushel a decrease of $0.30 at the midpoint.
U.S. Production
Sep # Avg. Trade Est. Trade Range USDA Aug
Corn Yield 181.3 177.8 175.5 - 180.0 178.4
Corn Production 14.827 14.529 14.351 - 14.607 14.586
Soybean Yield 52.8 52.2 50.9 - 53.8 51.6
Soybean Production 4.693 4.649 4.523 - 4.781 4.586
U.S. Ending Stocks 2017/18
Sep # Average Range of USDA
Trade Est. Trade Est. Aug
Corn 2.002 2.028 174.0-180.0 2.027
Soybeans 0.395 0.426 0.400- 0.472 0.430
U.S. Ending Stocks 2018/19
Sep # Average Range of USDA
Trade Est. Trade Est. Aug
Corn 1.774 1.639 1.477 - 1.785 1.684
Soybeans 0.845 0.830 0.722 - 1.000 0.785
Wheat 0.935 0.941 0.885 - 0.999 0.935
World Ending Stocks 2017/18
Sep # Average Range of USDA
Trade Est. Trade Est. Aug
Corn 194.15 192.24 190.28 - 193.77 193.33
Soybeans 94.74 95.57 94.00- 97.18 95.61
Wheat 274.36 272.92 271.00- 274.11 273.07
World Ending Stocks 2018/19
Sep # Average Range of USDA
Trade Est. Trade Est. Aug
Corn 157.03 154.48 151.71- 159.00 155.49
Soybeans 108.26 107.29 104.00 - 111.13 105.49
Wheat 261.29 257.58 252.00 - 261.37 258.96
Typically most producers take their soybeans to the elevator during harvest to conserve storage space at home for corn and other crops to sell at a later point when there is more carry in the market. The Williston Herald is reporting that this year is anything but typical in eastern regions of North Dakota for any farmer growing soybeans. A NDSU Risk Management Analysts Dr. Frayne Olson told the Herald that, “elevators in the eastern portion of North Dakota have pulled their bids for soybeans. There is literally no price for soybeans. Right now it’s a small number of elevators, but I do expect more as we get closer to harvest. It’s going to be very, very hard to sell soybeans at harvest. Elevators are trying to save storage space they have for the soybeans they have already bought on a contract basis.” Generally around 75% of all soybeans grown in North Dakota are transported by train to export terminals in the Pacific Northwest but the Chinese tariffs on U.S. soybeans is causing a host of issues for soybean producers nationally but particularly so in North Dakota. Olson explained, “We are at ground zero when it comes to soybean marketing problems, and the impacts of the Chinese tariffs. There have been no sales, and no expectation of any sales of soybeans out to the Pacific Northwest elevators. Some export companies are really scrambling. Grain is harvesting, and going to be moving soon, and they are trying to figure out where do we put it?” Farmers as well are faced with the question of space for the crop but they are also facing the question of how to make their operation cash-flow while this stale-mate continues.
Olson also discussed the process once this situation is resolved with China he said, “Farmers in their brains have it in their heads that when these tariffs go off, we can flip a switch and things will kick back to normal. That’s not the way it works. It’s going to take a long time for us to switchover and go back to exporting soybeans.” According to information Olson gathered from export terminals there is a lot of lead time and coordination involved with sending a load of soybeans to China. The exporting company generally does not have the beans on hand so they must go to work to line up enough bushels to fill an entire ocean freightliner and schedule the train delivering the bushels to the terminal with perfect timing so there are no delays. That process takes a minimum of a month utilizing the speediest and most expensive rates according to Olson. Elevators will move the supply of soybeans that they have been storing first before outside sources are bid for which will take time. Olson believes that producers need to be prepared to store their unsold bushels until at least the summer of 2019 and potentially even later.
Harvest is underway in several states across the nation. Several preliminary yield reports are listed:
South Dakota
· Minnehaha County-early beans 65 bushels per acre, farmers had expected a yield of 70+
Minnesota
· Clay County- early beans averaging 47-50 bushels per acre on ground with a 42-43 APH.
North Carolina
· Location not listed-1,000 acre of corn harvested. Averaged 165 bushels per acre vs 180 a year ago. Soybeans are still green.
Tennessee
· Location not listed-farmer is 1/3 done with corn harvest with yields running between 165-170 bushels per acre, disappointed compared to last year when yield averaged 180 overall.
· NW of Nashville-this producer is 20% complete with corn harvest and the corn yield is running between 160-170 bushels per acre compared to 180-185 bushels per acre a year ago.
Indiana
· Howard County-Received 4 inches of rain over the past few days so was only able to harvest a small field prior which averaged 240 bushels per acre.
Illinois
· Green County-yield is averaging 200 bushels per acre up from 180 a year ago. Moisture is already down to 15.5 out of the field and test weight is averaging 57-58 pounds. This yield is lower than expected, likely due to heat late in the season.
· Madison County-120 acres harvested, 19.5% moisture on yield monitor. Averaged 232 bushels per acre dry weight.
· Bureau County-First beans hauled across the scale made 70.9, yield monitor was off had yield measured at 100 bushels per acre.
· Livingston County-yield on 105 day corn was 253 bushels per acre, same to last year.
· Livingston County-240 bushels per acre had expected 250.
Missouri
· Lafayette County-Very dry area of the state. A 71 acre corn field averaged 82 bushels per acre, a 135 acre field averaged 107 bushels per acre and a 53 acre field averaged 83 bushels per acre. This producer has an APH of 160 and last year his average yield was 175.
Hurricane Florence is approaching the eastern coastline of the U.S. and is beginning to slow in speed and is now expected to make landfall sometime late-Friday. Accuweather Vice President of Forecasting and Graphics Operations, Marshall Moss said, “A storm with the track of Florence is unprecedented. It was located farther north in the Atlantic than any other storm to ever hit the Carolina’s, so what we’re forecasting is unprecedented. Also most storms coming into the Carolinas tend to move northward, and this storm looks like it’s going to stall over the region and potentially bring tremendous, life-threatening flooding.” It is estimated that there are 870,000 corn acres in North Carolina and 310,000 corn acres in South Carolina which represent approximately 150 million bushels of corn. There is also an estimated 100 million soybean bushels produced in this area at risk. North Carolina is the second largest producer of hogs in the U.S. and according to Reuters the Smithfield Company plans to halt operations in two of their North Carolina facilities on Thursday. The Tar Heel facility is the world’s largest hog plant which can process 35,000 hogs daily and has 4,400 employees. The Clinton, NC facility will also be shut down prior to the storm, this plant has the capacity to process 10,600 hogs daily.
The forecast outlook for the Midwest for the remainder of this week calls for above normal temperature and little to no precipitation. The map first map shown below gives the 7 day precipitation outlook from September 12th the 19th.
WeatherTrends 360’s 2-week outlook maps are shown below. As you can tell from the maps fall is in the air for a large portion of the eastern half of the U.S. beginning the week of September 17th.
