Record harvest of soy and corn expected in US

At 18:00 PM Dutch time, the USDA published its monthly report for grains and oilseeds, among other things, yesterday (August 12). As usual, there was considerable speculation by analysts and stock traders prior to the report. It became clear that the acreage figures were corrected expected. The record yields for soy and corn come as a surprise to many.

Higher stock of soy
What is particularly striking is the expected soybean harvest in the US. This is set at 4,589 billion bushels, which is still above what the trade had previously assumed. The area has been adjusted upwards by 1 million acre (405.000 hectares) and the yield per acre has also been positively corrected. This results in closing stocks rising to the highest level in six years. The soy market is already having a hard time now that China is purchasing less product. A strong dollar exchange rate also affects exports.

The USDA leaves its own processing untouched. The export volume is estimated to be slightly higher. Worldwide, the Americans also expect a larger stock of soybeans, of 134,3 million tons. That is 3,8 million tons more than previously thought. The soy harvest in Brazil remains unchanged and that of Argentina is corrected downwards by 500.000 tons.

The soybean futures market reacted strongly to the news. The November contract (new crop) closed at $9,86 per bushel, putting it below the psychological barrier of $10. The contract fell $1,6½ The September contract saw a similar decline. That's quite special. The crude oil market actually rose yesterday. That normally provides support for soybeans.

Less corn sown
The story is not much different for grain maize. Here, the USDA adjusts the sown area downwards by 323.755 hectares (800.000 acre). The area to be harvested is also adjusted downwards to 82,7 million acres. At the same time, the yield per acre has been adjusted upward to 183,1 bushels per acre. That's a record. Total corn production has not yet reached a record value, but it is very high, at 15,147 billion bushels. An increase of 47 million bushels compared to the July forecast.

The ending stock of corn is declining as expected. This is mainly due to more exports, while use for, for example, ethanol and food production is declining. Globally, the USDA has dropped corn production by almost 5 million tons, to 1,219 billion tons. The closing stock decreases slightly. As with soy, the Brazilian harvest figures remain unchanged and those for Argentina fell slightly.

Corn price stable
Stock traders had expected approximately these figures for corn. The record yield was unexpected, but a smaller harvestable area partly compensates for this. This ultimately caused corn to fall to $3,83¼ per bushel for the September contract. A decrease of 15 cents. The December contract rose slightly to just above $4 per bushel.

The USDA lowers wheat production to 1,98 billion bushels. That is a decrease of 26 million compared to the July forecast. The area to be harvested was slightly corrected to 37,9 million acres. That is a decrease of almost 365.000 hectares compared to the previous report. Lower wheat production also reduces ending inventory by 28 million bushels to 828 million bushels.

Globally, the USDA expects wheat production to increase by 2,09 million tons to 798,28 million tons. For Russia, the Americans assume 83 million tons of wheat and for the EU 128 million tons. That is quite conservative, considering that 116,5 million tonnes are already being discussed in Europe.

Wheat price falls
In Chicago, wheat also closed in the red. The September contract settled at $5,36¾. The Paris stock exchange was already closed when the report came out. However, wheat also ended lower on the Matif, at €214,50 per tonne. A decrease of €2,50 compared to Friday's close. Corn came to €202,75, a decrease of €1 compared to Friday.