Evening Report | Oct. 12, 2021

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USDA raises corn and soybean crop estimates, boosting ending stocks… USDA raised its corn crop estimate 23 million bu. from last month to 15.019 billion bu., whereas traders expected a 23-million-bu. decline. USDA raised the national average yield by 0.2 bu. to 176.5 bu. per acre, which would be just 0.1 bu. below the record in 2017. It left harvested acres unchanged at 85.085 million acres.

USDA raised its soybean crop estimate 74 million bu. from last month to a record level of 4.448 billion bu., which was 33 million bu. more than traders expected. It increased the national average soybean yield by 0.9 bu. to 51.5 bu. per acre, which would be the second highest on record behind 51.9 bu. in 2016. USDA left its harvested acreage estimate unchanged at 86.436 million acres.

USDA cut its cotton crop estimate by 505,000 bales from last month to 18.004 million bales, which was 366,000 bales more than traders expected. It cut the cotton yield by 24 lbs. to 871 lbs. per acre. USDA left the harvested acreage estimate unchanged at 9.922 million acres.

The following expectations are based on survey work by Reuters (Bloomberg for cotton). Find more report analysis here and report highlights here.

The larger-than-expected corn and soybean crops pared with bigger carry-in supplies pushed 2021-22 corn and soybean carryover higher than analysts anticipated. On the other hand, its smaller-than-expected cotton production estimate resulted in a lower new-crop carryover forecast than analysts anticipated. USDA’s U.S. wheat carryover estimate was near in line with expectations, but it cut global ending stocks quite a bit more than the market anticipated amid cuts to U.S. and Canadian production.

Corn harvest progress about as expected… Forty-one percent of the U.S. corn crop had been harvested as of Sunday, a 12-point advance for the week, USDA reports. That was a point shy of expectations but still 10 points ahead of the five-year average for this point in the season. The condition rating edged a point higher to 60% “good” to “excellent” (GE); analysts polled by Reuters had expected no change. The amount of crop in the top two categories is now just a point shy of year-ago.

Soybean harvest nears half complete… Soybean harvest advanced 15 percentage points over the past week to 49% complete, which was just a point shy of expectations. Harvest is running nine points ahead of the five-year average pace for this date. The condition of the crop edged a point higher to 59% G/E, whereas analysts had expected no change, on average. Last year at this time, 53% of the crop received top marks. While the rise adds to the narrative of impressive crops across the Midwest, condition ratings fade in importance at this point in the season.

Slow cotton harvest progress continues… As of Oct. 10, USDA reports 78% of the U.S. cotton crop had bolls open (82% on average) and 20% of it had been harvested (26% on average). Progress was a bit better relative to the average in Texas where 29% of the crop had been picked vs. the usual 27% at this point.

Average winter wheat planting progress, but emergence lags a bit… Winter wheat planting progress is running right in line with the five-year average pace at 60% complete as of Sunday. That was just a point lighter than analysts surveyed by Reuters anticipated on average. Emergence is a bit slower at 31% vs. the five-year average of 35%. Producers in Kansas have seeded 63% of their crop and 31% of it has emerged. That compares to the respective five-year averages of 55% and 33%.

Argentina issues reassurances its corn export market is still ‘open’… Following reports the country would close its export registry for 2020-21 corn shipments, the Argentine ag ministry issued a statement saying the country’s corn export market remains “open,” despite the policy. The CIARA-CEC chamber of export companies said the new policy did not mark a closing of exports but rather a move to prioritize already-booked corn for international sale. Farmers have deemed the move unnecessary and say it fosters distrust.

IMF trims global growth outlook… The International Monetary Fund pared its global economic growth projection to 5.9% in 2021, a 0.1-point decline from its July forecast. IMF explains: “The downward revision for 2021 reflects a downgrade for advanced economies—in part due to supply disruptions—and for low-income developing countries, largely due to worsening pandemic dynamics. This is partially offset by stronger near-term prospects among some commodity-exporting emerging market and developing economies.”

Looking out to 2022, IMF expects 4.9% growth. But it hedges that the spread of the Delta variant and threat of new variants have “increased uncertainty about how quickly the pandemic can be overcome.”

USDA launches first phase of soil carbon monitoring efforts via CRP initiative… USDA announced today it is investing $10 million in a new initiative to sample, measure, and monitor soil carbon on Conservation Reserve Program (CRP) acres to better quantify the climate outcomes of the program. This initiative will begin implementation this fall 2021 with several partners. Today’s announcement is part of a broader, long-term soil carbon monitoring effort across agricultural lands that supports USDA’s commitment to deliver climate solutions to agricultural producers and rural America through voluntary, incentive-based solutions.

USDA details that the models will include the Daily Century Model, or DayCent, which simulates the movement of carbon and nitrogen through agricultural systems and informs the annual National Greenhouse Gas Inventory report. Data will also be used to strengthen the COMET-Farm and COMET-Planner tools, which enable producers to evaluate potential carbon sequestration and greenhouse gas emission reductions based on specific management scenarios.   

USDA partners will conduct soil carbon sampling on three categories of CRP practice types: perennial grass, trees and wetlands. Find more details here.