USDA’s latest World Agricultural Supply and Demand report created market implications for both crops and livestock. Micheal Clements shares more.
Clements: USDA released the September WASDE report Monday, lowering crop estimates for both corn and soybeans. American Farm Bureau Federation Economist Bernt Nelson explains.
Nelson: The monthly World Agricultural Supply and Demand Estimates released Monday by USDA’s Office of the Chief Economist decreased corn supply for the start of the new marketing year. Now, this was largely driven by a drop in production due to a reduction in the national average yield and area harvested. Corn production is forecast at 415 million bushels lower than last month at 13.9 million bushels.
Clements: Nelson says USDA made changes to other crops as well.
Nelson: Soybean yield is forecast at 50.5 bushels per acre. This is down 1.4 bushels or three percent, from last month, and acreage was revised down by 600,000 acres. USDA increased the 22-23 cotton crop and ending stocks compared to August. Production was forecast at 13.8 million bales. Wheat planted acreage has changed only slightly in the 22 and 23 marketing year at 47 million acres.
Clements: Nelson adds the grain market response also has implications for livestock markets.
Nelson: A somewhat bullish report for grains doesn’t quite have the same effect for things in the cattle markets. So, leading into this report, December corn kind of rallied around 80 cents since August 18. November beans however had not built in quite the same bullish expectation as corn had, we had a much stronger response in the soybean market. This increases the cost of feed grains for a lot of our cattle feeders, so this inevitably puts some downward pressure on our feeder markets.
Clements: Learn more on the Market Intel page at fb.org. Micheal Clements, Washington.