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January 14, 2014

Reaction to Last Week's USDA Reports

USDA Crop Summary 2013 - The biggest surprise in the report was that the USDA lowered the 2013 U.S. corn yield from 160.4 bu/ac in last November's report to 158.8 bu/ac. Most analysts thought the November yield estimate was too high and now the 158.8 bu/ac sounds more reasonable given the type of summer weather experienced in 2013. The soybean yield was increased slightly from 43.0 bu/ac in November to 43.3 bu/ac. The late summer conditions were more favorable for the soybeans than for corn and it illustrates once again the recuperative ability of soybeans.

They estimated that 91.9% of the planted corn was harvested for grain and that 6.5% was harvested for silage. That would indicate then that 1.6% of the corn acreage (1.3 million acres) was abandoned. For soybeans they indicated that 99.1% of the planted soybeans were harvested, which left 688,000 acres of soybeans that were abandoned.

I think the corn yield is now more reasonable, but the corn harvested area seems on the high side. The soybean harvested percentage at 99.1% seems too high as well, but I am not going to quibble over the numbers. Therefore, there might be a small downward adjustment to both the 2013 U.S. corn and soybean estimates in next September's stocks report.

January WASDE Report - For soybeans in South America, the only change in the January report was an increase of 1.0 million tons in the Brazilian estimate from 88.0 to 89.0 million tons. The Argentine soybean estimate remained unchanged at 54.5 million tons as did the Paraguay estimate at 9.0 million tons.

For the South American corn crop, the USDA lowered the Argentine corn estimate one million tons from 26.0 to 25.0 million tons. The Brazilian corn estimate was left unchanged at 70.0 million tons.

I don't see much to argue about with these numbers. They increased the Brazilian soybean estimate a little and they reduced the Argentine corn estimate a little. The big disparity they have with Conab is concerning the Brazilian corn estimate. The USDA is estimating the Brazilian corn crop at 70.0 million tons and Conab is at 78.9 million tons with the difference probably being the safrinha corn production. Conab is still carrying forward all the safrinha corn production numbers from last growing season and the USDA is probably using a lower figure for safrinha corn acreage.