The USDA released a bullish September WASDE (World Agricultural Supply & Demand Estimates) report on Monday.
Dan Basse is president of AgResource Company in Chicago.
"The USDA surprisingly cut acreage both in corn and soybeans. Nine hundred thousand acres was the cut in harvested acreage of corn and it was 600,000 acres in soybeans. Both bigger than expected. Then we came up with lower yields. The U.S. yield on soybeans, 50.5 bushels an acre, that's down from last month's 51.9 and on corn 172.5, down from last month's 175.4. August weather was not kind to U.S. farmers. It caused corn and soybean yields to decline, also sorghum yields, left us with less supply. We're looking at 200 million bushels as the end stocks of soybeans, with an average cash price of $14.35 [per bushel] on farm. In the case of corn, we're left with end stocks of 1.219 [billion bushels] with an average cash price of $6.75 [per bushel]. No changes really on wheat. The wheat end stocks were left alone. Now of course, ahead of us will be the Stocks and Final Small Grains report on the 30th of September, but the numbers on soybeans and corn is causing a fairly sharp rally in Chicago here today."
Basse notes the corn harvest in the U.S. is just getting underway.
"We are only in early days. We are cutting down in the Gulf Coast, Louisiana, Mississippi, Alabama. Yields are down, quality is a concern. We expect to move northward into the southern Midwest by the later part of this week. Harvest is going to be no further than let's say three to four per cent on corn. A few percentage points on beans, we're just starting now to gather crops."