October 23, 2016

October 2016 USDA Supply & Demand Report

October 11th, 2016

Report Summary:

US Ending Stocks (16/17 in million bushels)
USDA August 16 Avg Estimate USDA September 16
Corn 2,384 2,359 2,320
Soybeans 365 413 395
Wheat 1,100 1,153 1,138

October-16-WASDE-US-World-cornCorn: Old crop ending stocks were raised from 1.716 to 1.738 billion bushels. This was fully expected by the trade as it comes from the September 30 quarterly Grain Stocks report. The focus on this report was new crop. Acreage is adjusted on the October report as USDA incorporates the numbers from the farm program into the survey by the statistics branch. Allendale expected a 211,000 acre increase. USDA gave us a 342,000 increase. Yields were lowered on this report from 174.4 bpa to 173.4. That was right on the trade guess of 173.5 (ALDL 173.6). Production was therefore lowered from 15.093 billion bushels to 15.057 (ALDL 15.054). USDA kept their domestic usage estimates unchanged but increased their export estimate by 50 million to now 2.225 billion. We can see the export change. This new number is 37% over the five year average. The actual year to date sales are 47% over the five year average. Normally a production drop would mean a corresponding drop in feed/residual. Given the smaller than expected wheat feeding in the June – August quarter, and the expansion still ongoing for livestock, it is not out of line. Ending stocks were lowered from 2.384 billion to 2.320. That was under the trade’s 2.373 expectation (ALDL2.387).

World Numbers: New crop world stocks fell from 219.5 to 216.8 million tonnes. A production decline and a 1 million tonne increase for exports for both Brazil and Argentina were responsible. This 216.8 is a decline from last month but still over the 210.1 from last year.

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