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July USDA Supply & Demand

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CORN: Corn production for 2017/18 was projected 190 million bushels higher based on increased planted and harvested area from the June 30 Acreage report. The USDA left the national average corn yield unchanged at 170.7 bushels per acre stating: USDA economists said "During June, harvested-area weighted precipitation for the major corn producing states was below normal but did not represent an extreme deviation from average. For much of the crop the critical pollination period will be during middle and late July."

2017/18 Corn ending stocks were raised 215 million bushels from last month as an increase in feed use was offset by increased acreage and a larger old-crop carryout. The season-average corn price received by producers was lowered 10 cents at the midpoint for a range of $2.90 to $3.70 per bushel.

The market broke lower on the bearish news as trade expected the USDA to reduce corn yield, even though historically they have only adjusted yield in this report in 2 of the last 10 years. With a hot/dry outlook for the rest of July the market will likely go back to trading weather after it digests these numbers. Noon runs brought more rain but it is still flip flopping.

 

SOYBEANS: U.S. soybean production is projected at 4.260 billion bushels, up 5 million on increased harvested area based on the June 30th Acreage Report. The soybean yield forecast was unchanged at 48.0 bushels per acre. Despite slightly higher production, 2017/18 soybean supplies are reduced 35 million bushels on lower beginning stocks. With demand estimates unchanged, 2017/18 soybean ending stocks were reduced 35 million bushels to 460 million.

Soybean exports for 2016/17 were projected at 2.100 billion bushels, up 50 million, reflecting strong export inspections and sales through early July. Crush was reduced 10 million bushels to 1.900 billion on lower soybean meal exports and domestic use. Soybean ending stocks for 2016/17 came in at 410 million bushels, down 40 million from last month.

The U.S. season-average soybean price forecast came in at $8.40 to $10.40 per bushel, up $0.10 at the midpoint. World 17/18 soybean ending stocks increased 1.33 million tons from last month to 93.53 million tons with trade guesses looking for 92.2 million tons.

Fundamentally, the report was supportive but soybean futures moved lower after the release while noon runs trended wetter for tomorrow.

 

WHEAT: 2017/18 U.S. wheat supplies were lowered on reduced U.S. wheat production more than offsetting higher beginning stocks and imports. Forecast 2017/18 U.S. wheat production was lowered 64 million bushels to 1,760 million. The production forecasts for durum and other spring wheat were down significantly with the USDA citing severe drought conditions affecting the Northern Plains. Partially offsetting this decrease was higher winter wheat production on both higher harvested acreage and yield.

Projected exports and feed and residual usage were lowered to 975 and 150 million bushels, respectively, largely on the reduction in durum and other spring wheat supplies.

Projected 2017/18 ending stocks are raised 14 million bushels to 938 million this month, but are 21 percent lower than last year’s revised stocks. The 2017/18 season-average farm price is raised $0.50 per bushel at the midpoint to a projected range of $4.40 to $5.20. World 17/18 wheat ending stocks declined 0.6 million tons from last month to 260.6 million tons with trade guesses looking for 256.6 million tons.

HRW wheat production estimates were above trade expectations helping move the wheat complex lower following the release of the numbers. Outside of initial profit taking, the HRW numbers will not likely do much to change the current trend higher in wheat markets. Spring wheat production came in at 385 million bushels, over 100 million bushels below last year with many private analysts expecting that number to get smaller.

2017-18 USDA U.S. Yield (bu/acre)
 
USDA
July
2017-18
Average Trade Est.
Range of Trade Est.
USDA
June
2017-18
Corn
170.7
168.9
165.0-170.7
170.7
Soybeans
48.0
47.8
46.0-48.0
48.0

2017-18 USDA U.S. Production (bln bu)
 
USDA
July
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
June
2017-18
Corn
14.255
14.074
13.595-14.253
14.065
Soybeans
4.260
4.241
4.078-4.277
4.255

2016-17 USDA U.S. Grain Carryout (bln bu)
 
USDA
July
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
June
2016-17
Corn
2.370
2.336
2.275-2.395
2.295
Soybeans
0.410
0.434
0.382-0.470
0.450
Wheat
1.184
1.176
1.142-1.184
1.161

2017-18 USDA U.S. Grain Carryout (bln bu)
 
USDA
July
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
June
2017-18
Corn
2.325
2.131
1.823-2.444
2.110
Soybeans
0.460
0.483
0.300-0.588
0.495
Wheat
0.938
0.879
0.757-0.957
0.924

2017-18 Wheat Production (bln bu)
 
USDA
July 2017
Average Trade Est.
Range of
Trade Est.
USDA
June 2017
All Winter
1.279
1.256
1.200-1.281
1.250
HRW
0.758
0.747
0.693-0.775
0.743
SRW
0.306
0.303
0.295-0.332
0.298
White
0.216
0.211
0.199-0.222
0.209
Other Spring
0.423
0.414
0.305-0.490
N/A
Durum
0.057
0.076
0.064-0.090
N/A
All Wheat
1.760
1.746
1.634-1.834
1.824

2016-17 USDA World Grain Carryout (million tons)
 
USDA
July
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
July
2016-17
Corn
227.51
225.7
223.0-228.0
224.6
Soybeans
94.78
93.2
92.5-94.00
93.2
Wheat
258.05
255.2
249.0-257.00
256.4

 2017-18 USDA World Grain Carryout (million tons)
 
USDA
July
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
June
2017-18
Corn
200.81
195.2
190.0-198.8
194.3
Soybeans
93.53
92.2
90.3-93.0
92.2
Wheat
260.60
256.6
250.0-262.0
261.2
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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.