Cash Strategist 8-18-21
The numbers in the USDA's monthly World Agricultural Supply and Demand Estimates (WASDE) report shocked many traders last week as yields were cut more than expected. The average U.S. corn yield is now estimated at 174.5 bushels per acre, a 5 bushel reduction from July. In turn, this lowered corn production by 415 million bushels for a total corn crop of 14.75 billion bushels. The USDA buffered this loss with a 35 million bushel increase to old crop carryout and a 190 million bushel decrease to new crop demand, split between feed and exports. This is expected to give the U.S. a tight 1.24 billion bushel new crop carryout, which is an 8.5% stocks-to-use ratio.
The USDA unexpectedly decreased old crop demand by 25 million bushels even though our current sales pace is already ahead of projections. This was enough to bump old crop ending stocks to 160 million bushels and temper the loss in new crop yields.
The expected U.S. soybean yield was reduced by 0.8...
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