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BRIAN HOOPS

By Staff | Sep 16, 2016

Informa: U.S. corn yield 174.8 bpa

Informa Economics has raised its estimates of corn and soybean yields from last month. Informa raised its corn yield estimate 5 bushels per acre, to 174.8 bushels, just below USDA’s 175.1 bushel per acre estimate. Informa raised corn acres based on the Farm Service Agency’s August data, which raises corn production to 15.3 billion bushels, about 150 million above USDA’s current forecast.

Informa also raised soybean acres, and the soybean yield is raised 1.8 bushels per acre, to 49.5 bushels, six-tenths of a bushel above USDA. The soybean crop estimate is over 4.1 billion bushels.

Informa’s planted corn acreage estimate is more than a million acres above USDA’s current estimate. Soybean acres are 332,000 above USDA.

Stone: U.S. soybean yield 50.1 bpa

FC Stone has also raised its corn and soybean yield estimates, to 175.6, and 50.1 bushels per acre, respectively. That’s an increase of 1.3 bushels per acre from last month for soybeans and six-tenths of a bushel for corn.

FC Stone now forecasts the U.S. corn crop at almost 15.2 billion bushels, and soybeans at 4.16 billion bushels. More private crop forecasts were due out this week prior to the release of USDA’s September crop report on Monday.

More soybeans in 2017?

According to a farmer survey released by Farm Futures magazine, U.S. farmers plan to increase soybean plantings next year to a record 84.4 million acres. That would be 700,000 more bean acres than this year. Corn area is pegged to be down a million acres, to 93.1 million next year, and farmers say they intend to reduce wheat acres to 49.1 million, which would be the lowest wheat acreage since 1970.

Farm Futures surveyed more than 1,200 farmers in late July and early August.

Storing this crop

There’s an avalanche of grain coming as U.S. farmers gear up to harvest record corn and soybean crops. And one question looms large: where will it all go? Growers are clearing bin space and elevators are prepping outdoor facilities to manage the surge of grain that will come off combines starting this month.

But it may not be enough. U.S. supplies of corn, soybeans and wheat – including newly harvested crops along with leftover inventories from last season -will outstrip all crop storage capacity for the first time in records through 1988, government data and analyst estimates show.

Projected production of corn, soybeans and wheat combined with last year’s inventories mean farmers and elevators will handle 24.3 billion bushels of grain in the 2016-17 season, outstripping the 24.2 billion bushels of on- and off-farm storage available, according to U.S. Department of Agriculture data.

Russian wheat exports

Russia looks set to boost exports and supply more countries with wheat fed to livestock after a record crop and weather damage left a bigger amount of grain unfit for human consumption.

The nation shipped about 272,000 metric tons of feed wheat in 2015-16 and the amount may be several times that this season, with some grain going to new markets such as South Korea, according to grain inspection firm SGS SA.

CORN ANALYSIS

Corn closed the week 11.25 cents higher.

Last week, private exporters did not report any private sales. In the weekly export sales report, total corn shipments for the 2015-2016 marketing year came in at 1.838 billion bushels. This was 5 percent short of USDA’s August projection of 1.925 bb.

Last week, NASS reported U.S. corn crop conditions at 74 percent good-to-excellent, down 1 percent from last week and well above the 68 percent rating last year. This year’s crop is the second highest rated corn crop in the last 20 years.

Corn is now 18 percent mature, an advance of 9 percent from last week and near the average pace of 20 percent.

The USDA was scheduled to give traders the next glimpse of market information on Monday with the monthly supply/demand data.

Trade was looking for the USDA to slightly increase its production figure due to high crop ratings. The USDA should be conservative with its estimate as it will most likely wait until more yield data comes in prior to making a major adjustment to crop estimates.

From the demand side, look for USDA to leave ethanol and feed usage unchanged while slightly increasing exports. This will leave ending stocks near unchanged, which are already burdensome.

Corn prices should slide lower into harvest, barring a surprise announcement from the USDA. Harvest data will determine the long term direction for the corn market. If prices begin to firm, watch the downtrend lines on the daily charts for a technical breakout as that will be a buy point for the fund traders.

Strategy and outlook: Producers should maintain hedges until harvest lows are scored.

SOYBEANS ANALYSIS

Soybeans closed the week 25.5 cents higher.

Last week, private exporters reported sales of 264,000 metric tons to an unknown destination and 220,000 mt of soybeans to China.

In the weekly export sales report, total soybean shipments for the 2015-2016 marketing year came in at 1.87 bb. This was within 1 percent of USDA’s August projection of 1.88 bb.

Last week, NASS said the US soybean crop conditions were also unchanged from the prior week at 73 percent g/e and well above the 63 percent rating last year.

Soybeans dropping leaves is 12 percent, versus 5 percent last week, and is in line with the average pace of 12 percent.

The USDA was scheduled to give traders the next glimpse of market information on Monday with the monthly supply/demand data.

Trade was looking for the USDA to slightly increase its production figure due to improving crop condition ratings during August. USDA should be conservative with its estimate as it will most likely wait until yield data comes in prior to making a major adjustment to crop estimates.

From the demand side, look for USDA to leave crush and mill usage unchanged, while slightly increasing exports.

This will create nearly unchanged ending stocks for soybeans. Barring a major bullish surprise, look for rallies to be sold by traders as they want to take profits ahead of the upcoming harvest and reposition when yield results become known.

Strategy and outlook: Producers should maintain hedges until harvest lows are scored.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

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