USDA Reports Summary

By Katie Micik
DTN Markets Editor

WASHINGTON (DTN) -- USDA lowered its forecasts for corn and soybean production to 13.56 billion bushels and 3.89 bb respectively.

On corn, USDA estimated the national average yield at 168 bushels per acre, up 0.5 bpa from last month. Harvested acreage was trimmed by about 500,000 acres to 80.7 ma, toward the low end of pre-report estimates.

Soybean yield came in at 47.2 bpa, up 0.1 bpa from last month. USDA also lowered harvested acreage by 1.1 million acres to 82.4 ma.

USDA's ending stocks estimates all fell within the range of pre-report expectations.

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Crop Production: http://www.nass.usda.gov/…

World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CORN

USDA's Crop Production forecasts incorporated certified acreage data from the Farm Services Agency. Farmers planted a total of 88.4 million acres of corn, but will only harvest 80.7 million acres for grain.

USDA is forecasting the crop will be the third largest on record.

Corn ending stocks for the 2015-16 marketing year are estimated at 1.561 bb, down 31 million bushels from last month's estimate. USDA made no changes to demand, and the drop is a result of the smaller production forecast.

The ending stocks-to-use ratio dropped slightly to 11.3%. The season average farm price was expected to range from $3.50 to $4.10, also higher than last month.

Globally, stocks were estimated at 187.83 million metric tons, down 1.9 mmt from last month. USDA lowered beginning stocks by 1.2 mmt to reflect higher feeding in the EU and Ukrainian exports. USDA lowered its 2015-16 production forecasts for Ukraine, Argentina, India, Philippines and several sub-Saharan African countries.

The global stocks-to-use ratio was unchanged at 19.2%.

SOYBEANS

USDA's production estimates for soybeans were within the range of pre-report estimates.

USDA made numerous changes to its soybean supply and demand estimates for 2015-16.

USDA incorporated the lower beginning stocks estimate from the last Grain Stocks report and its lower production forecast, resulting in a 66 mb decline in supplies. USDA increased its forecast for crush by 10 mb and cut its forecast for exports by 50 mb.

USDA also made some revisions to its 2014-15 supply and demand estimates, including increasing soybean crush by 30 mb and increasing exports by 18 mb.

Ending stocks for 2015-16 declined by 25 mb to 425 mb, and the stocks-to-use ratio dropped to 11.5%. The national average farm price range was left unchanged at $8.40 to $9.90.

Globally, USDA slightly increased stocks to 85.14 mmt. USDA increased Brazilian 2015-16 soybean production to 100 mmt from its previous estimate of 97 mmt. It also increased Brazil's production for 2014-15 to 96.2 mb.

Global stocks-to-use was unchanged at 27.4%.

WHEAT

USDA incorporated its smaller production estimate into the supply and demand estimates, lowering production by 84 mb to 2.052 bb. Feed and residual use declined 20 mb and exports dropped 50 mb, resulting in a 14 mb decline in ending stocks. Ending stocks are forecast at 861 mb.

The ending stocks-to-use ratio climbed to 41.6%. The national average farm gate price range was narrowed by a dime at both the high and low ends, ranging from $4.75 to $5.25.

USDA boosted global ending stocks by 1.93 mmt to 228.5 mmt on increased production and beginning stocks. USDA increased production in Australia and Canada by 1 mmt and EU production by 1.1 mmt.

Global ending stocks-to-use increased to 31.9%.

ANALYSIS

On the domestic side, USDA's October WASDE estimate of U.S. corn ending stocks for 2015-16 is 1.561 billion bushels, based on 13.555 billion bushels of estimated production with a yield of 168 bushels an acre. The 2015-16 ending stocks estimate is down from 1.731 billion bushels for 2014-15 and is more than expected, said DTN Analyst Todd Hultman. "Friday's report should be viewed as neutral-to-bearish for corn," Hultman said.

USDA's estimate of U.S. soybean ending in 2015-16 is 425 million bushels, based on 3.888 billion bushels of production and a yield of 47.2 bushels an acre. The 2015-16 estimate of ending stocks is up from 191 million bushels for 2014-15. "New-crop stocks were more than expected, and Friday's report should be viewed as neutral-to-bearish for soybeans," Hultman said.

USDA's estimate of U.S. ending wheat stocks for 2015-16 is 861 million bushels, based on 2.052 billion bushels of production and more than expected. "Friday's U.S. report should be viewed as neutral-to-bearish for wheat," Hultman said.

On the global side, USDA's estimate of global ending corn stocks for 2015-16 was reduced from 189.69 million metric tons to 187.83 mmt and is less than expected. The 2014-15 corn production estimate for Brazil was increased from 84.0 to 85.0 mmt.

USDA's world ending soybean stocks estimate for 2015-16 was increased from 84.98 to 85.14 mmt and is more than expected. The 2014-15 production estimate for Brazil was increased from 94.5 to 96.2 mmt.

USDA's estimate of world ending wheat stocks for 2015-16 was increased from 226.56 to 228.49 mmt and is more than expected. Production estimates showed increases for Australia, Canada, Europe and Ukraine.

"Friday's world estimates from USDA are slightly bullish for corn, but slightly bearish for soybeans and wheat," Hultman said.

Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT on Friday for a discussion on the latest USDA reports. Sign up now at: https://goo.gl/….

U.S. CROP PRODUCTION (Million Bushels) 2015-16
	Oct	Avg	High	Low	Sep	2014-15
Corn	13,555	13,461	13,798	13,050	13,585	14,216
Soybeans	3,888	3,884	3,989	3,590	3,935	3,927
Grain Sorghum	574	569	578	560	574	433
U.S. AVERAGE YIELD (Bushels Per Acre) 2014-15
	Oct	Avg	High	Low	Sep	2014-15
Corn	168	166.4	169.6	161	167.5	171
Soybeans	47.2	46.9	48	43	47.1	47.5
U.S. HARVESTED ACRES (Million Acres) 2014-15
	Oct	Avg	High	Low	Sep	2014-15
Corn	80.7	80.9	81.4	80.5	81.1	83.1
Soybeans	82.4	82.9	84	82.2	83.5	82.6
U.S. ENDING STOCKS (Million Bushels) 2015-16						Sep*
	Oct	Avg	High	Low	Sep	2014-15	2013-14
Corn	1,561	1,498	1,750	1,130	1,592	1,731	1,236
Soybeans	425	398	511	125	450	191	92
Grain Sorghum	42	39	42	36	41	18	34
Wheat	861	821	896	765	875	753
WORLD ENDING STOCKS (Million Metric Tons) 2015-2016
	Oct	Avg	High	Low	Sep	2014-15
Corn	187.8	189.2	193.0	181.7	189.7	197.2
Soybeans	85.1	84.6	86.5	82.0	85.0	78.7
Wheat	228.5	224.7	226.5	221.5	226.6	211.3
WORLD PRODUCTION (Million Metric Tons)
		2015-16			2014-15
		Oct	Sep		Oct	Sep
FSU - 12 wheat		117.5	117.0		112.7	112.7
European Union wheat		155.3	154.1		156.5	156.5
China corn		225.0	225.0		215.7	215.7
Brazil corn		80.0	79.0		85.0	84.0
Brazil soybeans		100.0	97.0		96.2	94.5
Argentine soybeans		57.0	57.0		60.8	60.8

(AG)

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