By Chris Clayton
DTN Ag Policy Editor
and
Emily Unglesbee
DTN Staff Reporter
WASHINGTON (DTN) -- Good weather and larger planting acreage are turning into record-breaking production for corn and soybeans as USDA pegs the corn crop at 15.15 billion bushels and soybeans at just over 4 billion bushels.
USDA's monthly World Agricultural Supply and Demand Estimates projected a record corn yield of 175.1 bushels per acre and a record soybean yield 48.9 bpa.
Corn ending stocks for the 2016-17 crop year are projected at 2.4 billion bushels and if realized would be the highest since the 1987-88 crop year. The stocks-to-use ratio would hit 14.7%, compared to 12.5% for the 2015-16 crop.
The U.S. ending stocks estimates were bearish for corn and soybeans and neutral for wheat, according to DTN Analyst Todd Hultman. The world ending stocks estimates were also bearish for corn and soybeans and neutral for wheat, he said.
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CORN
The 15.15 billion-bushel estimate for the new crop topped any of the analysts' pre-report forecasts, as did the 175.1 bpa yield. USDA's July figures were 14.54 billion bushels with an average yield of 168 bpa.
Total U.S. corn supplies for 2016-17 will hit a record 16.9 billion bushels with the larger crop and smaller increases for both beginning stocks and imports. Corn use is projected to be 300 million bushels higher as well, at a record 14.5 billion bushels. USDA raised feed and residual use by 175 million bushels with lower projected prices. USDA also raised exports 125 million bushels for the new crop as well.
USDA put the national average farm-gate price for the 2016-17 marketing year between $2.85 to $3.45 per bushel which is a 25-cent drop on both ends from the July estimate. The average farm-gate price for the 2015-16 crop was lowered to $3.60 per bushel.
SOYBEANS
USDA raised projected soybean production for 2016-17 by 180 million bushels to the record 4.06 billion bushels based on a bump in yield.
USDA projected record yield of 48.9 bushels per acre, up 2.2 bushels from the July estimate.
USDA lowered the 2015-16 ending stocks for soybeans to 255 million bushels due to higher exports and domestic crush. For the 2016-17 year, USDA raised ending stocks by 40 million bushels to 330 million bushels.
USDA's July report had pegged soybean production at 3.88 billion bushels and an average yield of 46.7 bpa.
The farm price for soybeans for the 2016-17 marketing year will range from $8.35 to $9.85 per bushel, which is 40 cents lower than earlier projections. The soybean price for the 2015-16 marketing year is estimated at $8.95 a bushel.
WHEAT
All-wheat production came in at 2.32 billion bushels, up 3% from the July forecast at 13% higher than last year. USDA pegged the average yield at 52.6 bushels per acre, up 9 bushels from last year.
Winter wheat production was projected at 1.66 billion bushels, up 21% from 2105.
Prior to the report, trade estimates averaged all wheat production at 2.27 billion bushels with winter wheat pegged at 1.63 billion bushels. Both estimates were just slightly higher than USDA's July figures.
USDA raised wheat domestic use for the new crop by 35 million bushels and also increased exports by 25 million bushels. USDA lowered 2016-17 ending stocks by 5 million bushels, coming in at 1.1 billion.
The average farm-gate price for wheat was lowered 10 cents a bushel to $3.70.
WORLD
Despite a reduction in Brazil corn production, foreign corn production was raised 2.1 million tons due to increases in Argentina, India and Mexico also offsetting production declines in the European Union and Canada.
The average pre-report estimates for 2016-17 global ending stocks had projected wheat at 251.5 million metric tons, which was 2.2 mmt below USDA's July report; the average corn ending stocks was estimated at 211.8 million metric tons; soybeans at 67.4 million metric tons.
ANALYSIS
On the domestic side, USDA increased its estimate of U.S. corn ending stocks for 2016-17 from 2.081 billion to 2.409 billion bushels, which more than expected, said DTN Analyst Todd Hultman. The yield estimate was increased from 168.0 bushels per acre to 175.1 bushels an acre. "Friday's U.S. report is bearish for corn," Hultman said.
USDA's estimate of U.S. soybean ending stocks for 2016-17 was increased from 290 million to 330 million bushels, a little more than expected. The yield estimate was increased from 46.7 to 48.9 bushels an acre. "Friday's report is bearish for soybeans," Hultman said.
USDA's estimate of U.S. ending wheat stocks for 2016-17 was increased from 1.105 billion to 1.110 billion bushels, which was roughly as expected. "Friday's report is neutral for wheat," Hultman said.
On the global side, USDA's estimate of world ending corn stocks for 2016-17 was increased from 208.39 million metric tons to 220.81 mmt, more than expected. USDA's world ending soybean stocks estimate for 2016-17 was increased from 67.10 mmt to 71.24 mmt, more than expected. USDA's estimate of world ending wheat stocks for 2016-17 was reduced from 253.70 mmt to 252.82 mmt, but was slightly more than expected.
"Friday's world estimates from USDA are bearish for corn and soybeans, and neutral for wheat," Hultman said.
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Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT Friday as he takes a look at the latest USDA Crop Production and Supply and Demand and report estimates. To register, visit: http://www.dtn.com/…
| U.S. CROP PRODUCTION (Million Bushels) 2016-2017 |
| Aug | Avg | High | Low | July | 2015-16 |
| Corn | 15,153 | 14,784 | 15,146 | 14,590 | 14,540 | 13,601 |
| Soybeans | 4,060 | 3,949 | 4,054 | 3,865 | 3,880 | 3,929 |
| Grain Sorghum | 475 | 430 | 450 | 410 | 407 | 597 |
| All Wheat | 2,321 | 2,269 | 2,360 | 2,061 | 2,261 | 2,052 |
| All Winter | 1,657 | 1,630 | 1,682 | 1,589 | 1,628 | 1,370 |
| Spring | 571 | 546 | `576 | 509 | 551 | 599 |
| U.S. AVERAGE YIELD (Bushels Per Acre) 2016-2017 |
| Aug | Avg | High | Low | July | 2015-16 |
| Corn | 175.1 | 170.8 | 175.0 | 168.6 | 168.0 | 168.4 |
| Soybeans | 48.9 | 47.6 | 48.8 | 46.7 | 46.7 | 48.0 |
| Grain Sorghum | 73.5 | 66.2 | 68.3 | 65.1 | 65.1 | 76.0 |
| U.S. ENDING STOCKS (Million Bushels) 2016-2017 |
| Aug | Avg | High | Low | July |
| Corn | 2,409 | 2,287 | 2,653 | 2,091 | 2,081 |
| Soybeans | 330 | 323 | 403 | 260 | 290 |
| Grain Sorghum | 51 | 56 | 66 | 46 | 46 |
| Wheat | 1,100 | 1,115 | 1,213 | 1,080 | 1,105 |
| U.S. ENDING STOCKS (Million Bushels) 2015-2016 |
| Aug | Avg | High | Low | July | 2014-15 |
| Corn | 1,706 | 1,720 | 1,903 | 1,671 | 1,701 | 1,731 |
| Soybeans | 255 | 328 | 370 | 285 | 350 | 191 |
| Grain Sorghum | 35 | 50 | 60 | 40 | 45 | 18 |
| WORLD ENDING STOCKS (Million metric tons) 2015-2016 |
| Aug | Avg | High | Low | July | 2014-15 |
| Corn | 209.34 | 206.30 | 208.00 | 203.00 | 206.90 | 208.51 |
| Soybeans | 73.00 | 71.40 | 72.70 | 70.00 | 72.20 | 78.41 |
| Wheat | 241.88 | 244.20 | 245.00 | 241.40 | 244.50 | 217.40 |
| WORLD ENDING STOCKS (Million metric tons) 2016-17 |
| Aug | Avg | High | Low | July |
| Corn | 220.81 | 211.80 | 228.70 | 201.20 | 208.40 |
| Soybeans | 71.24 | 67.40 | 69.50 | 64.50 | 67.10 |
| Wheat | 252.82 | 251.50 | 255.30 | 244.30 | 253.70 |
(AG)
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