August 18, 2020
USDA raises US corn, soybean output forecast
The US Department of Agriculture increased its estimates of US 2020/21 corn and soybean production more than what most analysts expected, Reuters reported.
The government's projection of the US corn crop was 15.278 billion bushels, a record high if realised and above an average of analyst expectations for 15.174 billion. The USDA put soybean production at 4.425 billion bushels, topping a range of analyst expectations.
Jim Gerlach, president, A/C Trading, said, "We've known we're going to have surpluses since the pandemic hit, really. We've known for a pretty good amount of time, at least several weeks, that we have a pretty good crop on our hands. I see today's reports as being confirmation of that. I think the market was looking for something similar and it got it, so you're seeing kind of a vanilla reaction."
"We see this report as less influential on price reaction, unlike other August report years. The trade will shift back to their focus on US weather developments and impact from the recent derecho that could cause a massive loss of acreage from Iowa and Illinois," Terry Reilly, senior analyst, Futures International stated.
Charlie Sernatinger, ED&F Man Capital, commented, "The USDA ramped up new crop Chinese bean imports to 99 million tonnes, up three million (from July), but incredibly left (China's) corn imports unchanged at seven million tonnes. They should be getting some flak on that one. Interestingly, the (US) spring wheat numbers were bearish, but the market is taking it in stride.. with a near record large spec short."