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The National Corn Growers Association offered a no-holds-barred response to USDA’s announcement Friday that it had corrected corn data in its September Crop Production report due to a “processing error.” USDA adjusted upward its September corn estimate, while leaving its October figure, which was released Oct. 9, unchanged.
In a statement, NCGA President Matt Frostic, a Michigan corn farmer, charged that the National Agricultural Statistics Service’s (NASS) recent reports “have cost corn growers BILLIONS of dollars in market value, at a time when profit margins were already marginal, at best, and the cost for fuel and other inputs are at all-time highs.”
Corn prices have dropped following recent reports and have continued to drop, he said. “An error of this magnitude is unacceptable, and only further erodes farmer confidence in the agency’s ability to produce statistically sound and accurate reports,” Frostic said, and called on NASS to “seriously examine the processes and procedures that led to this mistake and take immediate action to prevent it from occurring again.”
After announcing the error that had affected September corn estimates, USDA on Saturday offered further detail. In a separate announcement, the agency said that incorrect acreage weights were used to combine irrigated and nonirrigated field observations. The error affected September plant populations, ear counts and yield forecasts for Kansas and Nebraska, the 10-state regional averages and national figures.
- “The fact that USDA now says, ‘The review identified a September processing error involving incorrect acreage weights used to combine irrigated and non-irrigated objective yield observations for Kansas and Nebraska,’ certainly makes this look like an accounting error and nothing more,” said Agri-Talk host Chip Flory, who has pressed USDA for answers in the wake of the controversy that followed the Oct. 9 Crop Production Report. “However, as I have asked questions at different levels of this process, there are questions that remain unanswered about the data-gathering from the objective yield plots in September.”
Market recap: Soybeans fell hard, but ended off session lows, after Brazil’s election surprise sent the dollar soaring against the real to the detriment of U.S. exports. Corn felt continued harvest pressure while wheat and cotton extended losses amid broad dollar strength. Cattle futures were boosted after Friday’s friendly Cattle on Feed numbers, while hogs hit another contract low.
- December corn fell 1 cent to end at $4.55 after hitting a 4.5 month low.
- January soybeans dropped 16 cents to close at $12.52 ½, after hitting a two-month low. December soybean meal lost $5.90 to $340.20, while December soybean oil fell 18 points to 67.01 cents.
- December soft red winter wheat dropped 9 cents to close at $6.16, while December hard red winter wheat lost 5 ½ cents to $6.59. December spring wheat futures lost 7 ½ cents to close at $6.34. December SRW and HRW contracts both hit 3.5 month lows.
- December cotton ended 114 points lower at 79.06 after trading at its weakest in three weeks.
- December live cattle rose $0.075 to end at $231.20 after hitting a 3.5 month high in early trade, while November feeders gained $0.425 to $348.55.
- December lean hog futures lost $0.90 to finish at $64.675.
Read: Why Brazil’s post-election currency plunge sank soybeans on Monday
Corn harvest still behind… USDA’s weekly crop progress data shows soybean harvest moving ahead of the average pace for this time of year while corn continued to lag behind despite a big leap in the past week.
- USDA said 60% of the corn crop was harvested as of Sunday, up from 44% a week earlier but behind the five-year average of 66%. Analysts surveyed by Bloomberg, on average, were expecting a 59% harvest figure. Iowa, at 47% complete, was 20 percentage points behind the average pace, while Nebraska was nine percentage points behind its average at 55%. USDA said 56% of the U.S. corn crop was rated “good” or “excellent,” unchanged from the previous week and matching expectations. USDA will discontinue crop ratings now that harvest is more than 50% complete. The final Pro Farmer Crop Conditions Index for corn (0 to 500 scale, 500 equals perfect) edged up 0.02 point to close the season at 349.26.
- USDA said 79% of the soybean crop was harvested, up from 64% a week ago and two percentage points ahead of the five-year average and the average guess.
- USDA said 76% of the winter wheat crop was planted, one percentage point behind the five-year average and one percentage point ahead of the average estimate. Emergence is also just one point behind the five-year average at 53% after lagging early, as intermittent rains in the Plains over recent weeks helped germination.
- Cotton’s final condition rating of the season showed 33% of the crop in good to excellent condition compared to the five-year average of 40%.
Brazil weather worries surface… After a better-than-expected start to planting season, weather concerns are starting to emerge in Brazil, said Dr. Michael Cordonnier, Pro Farmer crop consultant. Too much rain in southern Brazil has been accompanied by cooler-than-normal temperatures and localized frosts, he said. The pattern for several months has seen heavy rain in Parana, Rio Grande do Sul and Santa Catarina. The other concern is dryness in parts of central and northeastern Brazil. Southern Brazil has seen a slowdown in soybean planting, while the immediate impact has been on wheat and other small grain production, which will force Brazil to import more high quality wheat from Argentina, he said. Meanwhile, persistent wet conditions in southern Brazil have started to take a toll on the early planted summer crops in Parana.
- Cordonnier, however, left his soybean production estimate for Brazil unchanged at 182 million tons with a neutral bias. Soybean production will depend on November and December weather, he said. He left his Brazil corn production estimate unchanged at 140 MT with a neutral bias. He also left his Argentine soybean and corn estimates unchanged at 54 MT and 60 MT, respectively, both with a neutral bias.
Brazil reports second Newcastle case… Brazil’s Agriculture Ministry reported that a second Newcastle disease outbreak was identified in Santa Catarina state at a poultry farm in Corenel Freitas, Reuters reported. The new case is within a restricted area, requiring only a small adjustment to the containment zone after an initial case was reported last week at a turkey farm, the report said. Santa Catarina accounts for around 15% of poultry production in Brazil, which is the world’s largest exporter of chicken meat. The report noted that China and Saudi Arabia halted poultry imports from Santa Catarina last week, while Mexico imposed a nationwide ban.
Don’t miss this week’s Pro Farmer Podcast: Hillari Mason, Spencer Langford and Bill Watts break down USDA’s September corn estimate error, the implications of Brazil’s election outcome, Friday’s Cattle on Feed numbers and more.