September Supply and Demand Report Recap


After all of the news from crop scouts in the corn belt a few weeks ago, the much anticipated September WASDE report has been released. One of the bigger surprises came with the estimated corn yield. Pre-report estimates were expecting a reduction in corn yields from last month on news that the Iowa corn crop was not as good as previously thought. But, the USDA actually revised yields 0.9 bu/acre higher with a great crop in the South and the Eastern Corn Belt more than offsetting lower yields further West. The increase in yields will result in a record 13.843 billion bushels in corn being harvested this fall. Even with an increase of 55 million bushel in demand, ending stocks were revised up 15 million bushels from last month. Mississippi is expected to top last year’s record corn yields with a 170 bu/acre yield.


With reports coming out a few weeks ago of poor pod counts, it is unsurprising that the USDA revised soybean yields down by 1.4 bu/acre to 41.2 bu/acre. This figure is in line with most pre-report estimates. The lower production is partially offset by decreased crush and exports, however ending stocks were still revised down by 70 million bushels from last month to 150 million bushels. This is only 25 million bushels more than last year’s ending stocks.


Stocks of old crop (2012) cotton increased 100,000 bales based on end of marketing year data (the marketing year closed July 31, but balance sheets are still being updated). This pretty much flowed through into the new crop (2013) revised stocks number, which also increased 100,000 bales to 2.9 million total. This is not to say that no changes were made to the 2013 supply and demand projections. The U.S.’s 2013 yield was lowered 17 pounds per acre to 796 (Mississippi’s yield forecast was increased 19 pounds per acre to 1,009) due to lingering drought in West Texas which has kept a lid on crop condition ratings the past number of weeks. This pulled total 2013 production estimates down to 12.9 million bales from 13.05 projected last month (harvested acres were increased by 80,000 to 7.78 million as more information comes in from sources such as Farm Service Agency). Exports were lowered by 200,000 bales to 10.4 million due to the slow pace of sales thus far in the current marketing year.

Globally, projected ending stocks were raised by 960,000 bales largely due to increases from Brazil and India, and are currently projected at 94.73 million. Brazilian ending stocks rose 190,000 bales from last month’s estimate (currently pegged at 6.23 million bales) and India’s projected ending stocks increased 600,000 bales (to 9.39 million from last month). Despite China not seeing many revisions with their crop or ending stocks, they continue to hold the lion’s share of the stocks (62% of total world stocks).


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