USDA Report Update – August 2019

With the highly anticipated USDA report coming out last Monday, I think it is safe to say that it shocked most people with the outcome. Corn prices plummeted after the USDA report forecasted higher corn plantings and planted acres.

December corn futures fell on Monday by 6%, dropping it below 4 dollars a bushel for the first time since May. The November soybeans dropped 1.4% also.

The reaction from the market was similar to the one in June when USDA also estimated higher corn acreage than the level expected in the market. The report had big adjustments from projections in July. The August forecast places corn production in the 2019-2020 year at 13.901 billion bushels, which is up from July’s estimate of 13.875 billion bushels. Corn yields surprised and were estimated to be 169.5 bushels per acre, up from 166 bushels per acre in the July report.

Here is an interesting photo of Prevented Planting in acres by County.

Photo by Extended Ag Services

Meanwhile, the soybean production was projected to be 3.68 billion bushels, which is down from 3.845 billion bushels last month. Also, the soybean harvest is forecast at 75.9 million acres with the planted area for the nation estimated at 76.7 million acres, which is down 4% from the June estimate, and down 14% from last year. The soybean yields are expected to average 48.5 bushels per acre, down 3.1 bushels from last year. There is also the possibility that Arkansas, Kentucky, and Tennessee could produce record-high yields from the forecast. 

It was an eye-opening report and now that we know the numbers the market will turn its attention to the upcoming crop tours and weather.  Many are curious to see if the crop tour results resemble what the USDA forecasted in their August report.  Needless to say, there is still a lot of uncertainty in the size of the crop and believe we will continue to see volatility.  If you have any marketing questions please feel free to reach out to one of the marketers.

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