USDA's September World Agricultural Supply and Demand Estimates report is not usually one of the year's most anticipated, but hot, dry late-summer weather had traders speculating about a deep cut to corn yields. The agency lowered its estimate from 180.7 to 178.5 bushels an acre, a hair above the average trade guess of 178.2 and inside a wide range of 173.2 to 182.9, Farm Progress reports. Corn rose modestly on the release; soybeans fell by double digits and winter wheat eased.

Corn production dropped 213 million bushels to 15.8 billion on the lower yield and a fractionally smaller harvested area of 88.5 million acres. Feed and residual use was cut 150 million bushels, exports held at 3.3 billion, and ending stocks came in 86 million lower at 1.567 billion bushels, above the trade's 1.528 billion. The season-average farm price rose 30 cents to $4.80. South American corn was unchanged at 2.165 billion bushels for Argentina and 5.472 billion for Brazil, and world ending stocks fell from 274.66 to 272.10 million tonnes.

Soybean yield edged up a tenth to 52.8 bushels when the trade expected a dip to 52.5, and production rose 16 million bushels to 4.5 billion, very near the record. Crush was unchanged, exports rose 25 million bushels to 1.69 billion, and ending stocks slipped 10 million to 310 million bushels. USDA raised its season-average price 60 cents to $12 a bushel, soymeal by $30 to $340 a short ton, and left soy oil at 70 cents a pound. Argentina and Brazil were unchanged at 1.837 billion and a record 6.834 billion bushels; world stocks eased to 124.02 million tonnes, less than the trade expected.

Adviser Jon Scheve of Scheve Grain called the report neutral rather than bearish for beans. "We're still almost at $13," he said. "We're still coming in with a carryout that's going to be as tight as last year, if not tighter. I don't think we've seen the high at all in soybeans," and a run above $14 remains possible on strong demand and shrinking stocks.

For wheat, every aggregate US supply and use figure was unchanged, with ending stocks at 717 million bushels and minor by-class shifts as white wheat exports rose and hard red winter and spring fell. The farm price forecast rose 20 cents to $6.40. World wheat stocks were raised from 273.25 to 276.29 million tonnes, above the trade estimate but still below last year's 280.60 million.

Source: Farm Progress