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USDA probably raised more questions in the August Crop Report than providing answers. They lowered their yield estimate for corn 1.2 bpa to 169.5 bpa, which was well above the trade guess of 166.0 bpa. Production fell 102 MB to 14.153 BB with ending stocks for 2017-18 down 52 MB to 2.273 BB. World stocks, on the other hand, rose slightly to 200.9 million tons. Meanwhile, usage fell 50 MB to 14.3 BB. This was a disappointing report all the way around for traders. What the USDA is telling us is that they are going to be conservative in reducing their yield estimate. Like it or not, that is the way it is!
August is a crucial time for soybeans as the crop can be made, or lost because of adverse weather. After concerns of dry conditions in July, cooler temperatures and rainfall this month have alleviated many of those worries. That was apparent in the crop report when USDA raised their yield estimate 1.4 bpa to 49.4 bpa. This resulted in production rising 121 MB to 4.381 BB with 2017-18 ending stocks growing 15 MB to 475 MB. Meanwhile, world stocks were ratcheted 4.3 million tons higher to 264.7 million. Like corn, this was a disappointing report as traders were expecting a 2.0 bpa reduction in USDA’s yield estimate. That may come in following reports, but the improvement in weather this month is likely tempering attitudes.
USDA did not offer much in the way of surprises in the August Crop Report for wheat. All wheat production was lowered 21 MB to 1.739 BB, while winter wheat was up 8 MB to 1.287 BB. Spring wheat, the other hand, fell 21 MB to 402 MB. Ending stocks for 2017-18 were down 5 MB to 933.0 MB. In the meantime, world stocks grew 4.1 million tons to 264.1 million. The report was considered negative for wheat as it was above expectations.
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