USDA Report Cheat Sheet – Expectations for Corn

Harvested corn pouring into grain truck. Photo: University of Tennessee

I have spent the last two days talking to every expert I know about the corn, soybean, wheat, and rice situation.

  • First, no one is expecting a 3-5 bushel drop in corn yield on Friday. It is hard to believe that after 11.2 million acres of Prevent Plant, an extremely late crop, and then 3 hard freezes and a lot of snow in October, that USDA would not drop yield by 5 Bushels per acre.
  • I have talked to Steve Freed, chief grain analyst at ADMIS , Brian Grady at Pro Farmer, and other professional grain traders and merchandizers. They all believe that USDA will be very reluctant to slash the real yields now.
  • We get the final USDA report on the 2019 crop in January. At that time they may show some additional abandoned acres, but probably not the increase that my research indicates is warranted.
  • Most of those men I just mentioned believe that we will not get a real accounting of our true grain situation until the March 30, 2020, NASS Stocks report. All this wet grain will be dried down and some will have been ruled unusable; only then we will see that we have a shortfall.
  • Next we must consider that we are very close to signing a grain deal with China. However, because the Chile meeting was cancelled, both countries are trying to pick a new meeting location and date. All the political wrangling and maneuvering may delay this yet again by a few weeks.
  • Therefore I see little hope that December corn contracts will see any measurable rally at this time. So all holders of December corn should be deciding whether they want to roll to March contracts after the USDA report tomorrow.
  • Of course, I could be wrong, it is possible (but not probable) that USDA could drop yield by more than expected and Trump could announce a signing deal with XI in 10 days. If so December corn would rally over $4.00 and set off a round of short covering that would take us to $4.10- 4.20.
  • At this time most people believe we will stay in the $3.70 -$4.00 range on December corn.
  • When I question USDA on their numbers over the last 10 years , they make it perfectly clear that they are not putting out these reports for farmers or elevators, they are creating them for the Office of Management and Budget, and for Congress.
  • We have another Major cold front with snow blowing into the Midwest today. It was seven degrees F in Valentine, Nebraska this morning.
  • This crop is getting smaller, we all know that but USDA will not report it.

WASDE trade estimates. Click Image to Enlarge


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