Crop prices shot higher across the board this morning, after USDA surprised bearish traders with smaller than expected estimates for 2013 corn and soybean production. Soybeans, which were already rallying ahead of the agency's 11 a.m. release, added to gains when the government lowered both its estimate of yields and acreage after resurveying producers in key states.
USDA put new crop soybean production at 3.255 billion bushels, 165 million below the statistical guess made in July. In addition to slashing yields to 42.6 bpa, USDA cut its estimate of planted acreage by 500,000, lowering harvest acreage a similar amount. That was close to the reduction found by Farm Futures recent survey of producers, though our yield estimate was higher.
USDA kept its 2012 ending stocks forecast at 125 million, as expected, but cut its estimate of 2013 carryout by 75 million bushels to 220 million. Crush would drop 20 million from its July estimate, the government said, with exports off 65 million. The average cash price for the crop was put at $11.35, up 60 cents from last month.
USDA's numbers weren't as friendly for corn, but still helped December futures reverse higher after making new lows. USDA started by cutting 10 million bushels off old crop carryout due to stronger exports. The agency's first field-based estimate of 2013 production came in at 13.763 billion bushels based on yields of 154.4 bpa. USDA made no change to its acreage estimates in this report, though the Farm Futures survey also found farmers cut corn plantings due to bad weather this spring.
On the demand side of the new crop balance sheet, USDA trimmed 75 million bushels off feed usage and exports, in the end cutting 122 million bushels off its forecast of ending stocks, to 1.837 billion. That raised its average cash price forecast for the crop by 10 cents to $4.90.
Wheat prices also moved higher after the report, though initial gains at all three exchanges were paired in the first half hour of trading USDA cut its estimate of 2013 crop ending stocks by 25 million bushels, to 551 million due to stronger exports, and jiggled its tally of new crop production, with increases for soft red winter wheat and durum offsetting declines by hard red spring wheat, white wheat and hard red winter wheat.
However, lower world prices caused the agency to lower its forecast for average cash prices by 10 cents, to $7.
Download the full report below.
2012-2013 Crop Ending Stocks
Corn 719 mil bu
Soybeans 125 mil bu
2013-2014 Crop Ending Stocks
Wheat 551 mil bu
Corn 1837 mil bu
Soybeans 220 mil bu
2013 Crop Production
Corn 13.763 bil bu
Soybeans 3.255 bil bu