USDA Report Worksheet with U.S. Yield Maps and South American Weather
Update for November 11th, 2020
Yesterday’s USDA reports sent commodity prices soaring, with the 4th consecutive month of friendly estimates. Some of the particulars:
November estimates forecast 2020 corn production at 14.507 billion bushels which is a significant 215 million bushel reduction from October. Yields were cut from 178.4 bushels per acre a month ago to 175.8 bushels per acre while corn exports were increased by 325 million bushels to 2.065 billion bushels-a new record! All of this contributed to the ending stocks estimate of 1.7 billion bushels, a 75 million bushel reduction from October and the smallest ending stocks since 2013-14. Global ending stocks were cut to 291.4 million tons, a reduction of 9 million ton from a month ago. The U.S. season average corn price was raised by an impressive $0.40 to $4.00 per bushel.
The USDA reduced U.S. soybean production by 98 million bushels and yields were lowered from 51.9 bushels per acre to 50.7. Exports were left steady but seed demand was increased based on the rational that soybean acreage will increase in 2021. The U.S. season average soybean price was bumped higher by $0.60 per bushel to $10.40.
November USDA Supply & Demand
Nearby contracts for both corn and soybeans posted new highs following yesterday’s updated numbers. Since the October report analysts had been questioning why the USDA had not revised their China corn export forecast to meet their total of orders at that time. Well the revision was made which raised the projection by a massive 86%! The estimate now sits at 13 MMT vs the 7 MMT from previous reports. This raises projected corn exports by 14% overall to a record 2.65 billion bushels.
Providing these forecasts are accurate the U.S. is looking at a corn carryout of 1.702 billion bushels by the end of August, 2021, we haven’t had stocks that low since 2013. Of course all of these figures are fluid and could be adjusted in either direction over the coming months but it’s encouraging to hear the auctions of the domestic corn reserves in China are still trading at over $9.50 per bushel.
The USDA state yield map below explains the adjustment to the U.S. corn yield average. Each state is color coded according to results and includes the overall state yield and the change in yield from October to November.
Soybean production was also cut more than the trade had expected but demand was basically left unchanged from a month ago. The projected U.S. soybean carryout of 190 million bushels will be the lowest in 5 years if realized. The USDA left Brazil’s soybean production estimate unchanged at 133 MMT but reduced production from 53.5 MMT to 52.0 MMT for Argentina.
The USDA soybean yield map is shown below, each state is color coded and includes the overall yield as well as the change from last month.
Source: USDA NASS
Dr. Michael Cordonnier of Soybean and Corn Advisor has stated that the 2020/21 Brazilian corn crop could be in trouble for two reasons. The most important reason is that the second crop corn-Safrinha is going to be planted later than normal across most of the country due to the delay in planting the first crop (soybeans) this season. The late planting means the crop will require good precipitation through the month of May in order to see good yields. Cordonnier sees the other big reason corn production could be in trouble is the fact that the full-season corn that has been planted in southern Brazil has not received adequate rainfall, this has stressed the crop now for several weeks. Both of these issues point to a rough start for the Brazilian corn crop this growing season. The maps shown below illustrate the expected precipitation compared to normal through November 24th. Rainfall is forecast to arrive in some of the key soybean production regions of Brazil that have been abnormally dry so far this season, but remember the La Niña weather pattern that is strengthening could upset normal rainfall patterns throughout the season.
The following map indicates the expected precipitation over Argentina for the next 13 days compared to normal, most growing regions are forecast to receive below normal rainfall during the period.
The first map shown includes the total precipitation expected across the U.S. from today through Monday.
Looking out at the 6 to 10 day forecast the Midwest can expect to see a rebound in temps and below normal precipitation for the 5 day period beginning on Monday.