FC Afternoon Grain Market Commentary for 8/12/2013

PM Comments 08/12/13

Monday, August 12, 2013, 3:16 pm
Submitted by: Dustin Weiner

Good afternoon!

 

The USDA’s August S&D report was out this morning, and was a bit surprising to the market.  Starting with corn… the harvested acres did not change, but the projected corn yield dropped 2.1bpa down to 154.4.  There were many private companies who were actually projecting an increase in corn yield – thanks to the great conditions in the eastern corn belt and the decent conditions in the West.  This dropped production by 187 million bushels (when compared to last month’s numbers).  It is important to note that if this comes true, this would still be a record large U.S. corn harvest.  The current ending stocks projections for next year went down of course, but are still at 1.837 billion bushels – the largest in 8 years.  For reference, our carryout projection for this summer is only 719 million bushels.  In the grand scheme of things, the numbers we saw today aren’t necessarily friendly overall, but for today – it pushed corn a little higher as production was slightly less than expected.

 

As for soybeans… as planned, they resurveyed soybean planted acres and dropped the total acres planted and harvested by 500,000 acres.  They also dropped projected yield by 1.9bpa, down to 42.6.  This lowered production by 165 million bushels (when compared to last month’s numbers).  None of this was overly surprising but it confirms a fear that the market has had for a short while now – that the soybean crop size potential may be slipping.  Ending stocks projections for next year fell 75 million bushels (when compared to last month’s number) down to 220mb.  For reference, our carryout for this summer is 125mb, so even though it is a little tight next year – it is definitely manageable. 

 

The USDA’s weekly crop conditions report was out this afternoon at 3pm.  US corn G/E ratings were unchanged and soybeans G/E ratings were also unchanged – both at 64% good-to-excellent.  This was as expected.  Below are graphs showing how we track versus previous years – both in respect to the U.S. and to the state of Iowa. 

http://www.fccoop.com/markets/commentary_detail.cfm?CommentaryID=1807