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USDA Worksheet and Finally A Drier Outlook

Update for October 10th, 2018

The USDA will release the October Supply and Demand report tomorrow, November 11th. Traders are looking for the agency to reduce harvested acres but increase yields by 0.5 bushels per acre for both U.S. corn and soybeans. This increase would raise total corn production by close to 50 million bushels and would increase total soybean production up to 40 million bushels. If this occurs a larger carryout would also be expected. Corn export inspections for this week were excellent again which has the trade also looking for a revision in that category with the recent increase in exports. Soybean export numbers came in at the lower end of trade estimates and considerably below the level needed to meet the USDA’s forecasted amount.

2018-19 USDA U.S. Harvested Acreage (million acres)

USDA Average Range of USDA

Oct 2018-19 Trade Est. Trade Est. Sep 2018-19

Corn 81.720 81.400-81.897 81.800

Soybeans 88.720 88.353-88.900 88.900

2018-19 USDA U.S. Yield (bu./acre)

USDA Average Range of USDA

Oct 2018-19 Trade Est. Trade Est. Sep 2018-19

Corn 181.8 180.6-183.5 181.3

Soybeans 53.3 52.0-55.0 52.8

2018-19 USDA U.S. Production (billion bu.)

USDA Average Range of USDA

Oct 2018-19 Trade Est. Trade Est. Sep 2018-19

Corn 14.872 14.700-15.220 14.827

Soybeans 4.733 4.623-4.890 4.693

2018-19 USDA U.S. Grain Carryout (billion bu.)

USDA Average Range of USDA

Oct 2018-19 Trade Est. Trade Est. Sep 2018-19

Corn 1.919 1.766-2.352 1.774

Soybeans 0.898 0.778-0.985 0.845

Wheat 0.950 0.895-0.997 0

Corn is seeing prices climb to levels not visited for several weeks due the continued strong demand for U.S. corn and renewed confidence in our trade negotiations. In addition there is a chance that with the large-scale harvest weather delays seen across the Plains and Upper Midwest the market could become more concerned. The USDA is reporting that as of the start of this week 34% of the nation’s corn has been harvest which is an 8% increase from the previous week and 8% ahead of the 5-year average. Soybean harvest is reported at 32% complete which is up 9% over the previous week but is still 4% behind the 5 year average for this time. It will be interesting to see how much harvest progress is made in next week’s report given the widespread precipitation this week. Farmers across the country received some much awaited news last evening from President Trump. In a rally in Council Bluffs, IA the President announced that the ban on summer sales of gasoline blended with 15% ethanol (E15) is being lifted. He told the crowd at the rally in Iowa that, “we are unleashing the power of E15 to fuel our country all year long”.

The U.S. has trade agreements made with Taiwan, South Korea and both Mexico and Canada and now we are hearing that U.S. leaders are looking to form a Trade Coalition with Japan and the European Union to confront China in an effort to add more pressure on the nation. In an effort to reduce their reliance on soybean imports China has proposed reducing the minimum thresholds for protein content in livestock feed by 3%. If this change is adopted it would cut their demand for soybeans by 10MMT this year. Reuters has reported that negotiations may begin soon between EU countries (European Union) and the U.S. to allow more American beef into the region. The European Commission requested approval from its 28 member states back in early September to begin talks to increase the share of U.S. hormone free beef imports into Europe. If an agreement can be reached it would end a dispute that dates back to 1981 when the EU banned the use of all growth hormones.

Rainfall has continued to slow harvest progress and has kept most Midwest producers out of their fields all week. Some areas have received nearly double their normal precipitation totals. Snow has been even been falling across the central Plains, Dakota’s and northern Minnesota leaving significant snow cover for this point of the season in those areas. In addition a cold front has moved in and is expected to persist for the next couple of weeks which will drop temps 5-12 degrees below normal for the Corn Belt and Southern Plains.

The following maps show the outlooks for October 17th-23rd. It’s wonderful to see below average precipitation continue.

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