Milling & Baking News - August 18, 2015 - 30

Grain Market Roundtable X

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30 / August 18, 2015 XMilling & Baking News

the nearly ideal conditions last year.
"Corn did not see its lows today," Mr.
Meyers said. "Prices will be on the defensive." He expects a low around $3.40 a bu
in December corn futures between now
and the end of November, most likely after
the October crop report.
"I think if we have a couple weeks of drier weather in the Midwest, we could lose
some of that yield before the next report,"
Mr. Meyers said. But he noted the U.S.D.A.
was starting with a high yield number.
In its latest Crop Progress report, the
U.S.D.A. rated corn in the 18 major states
at 70% good to excellent as of Aug. 9, unchanged from the prior two weeks and
just 1 percentage point below a year ago.
Ratings in the 10 largest corn producing
states were above the 18-state aggregate
in Iowa, Nebraska, South Dakota, Minnesota and Wisconsin but below in Illinois,
Indiana, Ohio, Missouri and Kansas. Aggregate corn crop development mostly
was on par with last year and the fiveyear average.
In its crop report, the U.S.D.A. forecast sharply lower yields from 2014 in
Illinois, Indiana, Ohio and Missouri, areas plagued by excessive moisture much
of the season, but higher yields in Iowa,
Minnesota, Wisconsin, South Dakota, Nebraska and Kansas.
Mr. Meyers said he was not as surprised
by the WASDE numbers, in which the
U.S.D.A. projected record large corn supplies, increased domestic use and lower
exports for 2015-16, which begins Sept.
1. He noted that new crop corn export
sales have been running behind the average pace, so a lower export forecast was

expected. Lower corn prices suggested
increased use of corn for feed and ethanol.
The U.S.D.A. projected 2015-16 total
U.S. corn supply at a record 15,488 million bus, up 154 million bus, or 1%, from
its July projection and up 11 million bus
from 15,477 million bus this year.
Feed and residual use of corn in 201516 was projected at 5,300 million bus, up
25 million bus from July and equal to the
2014-15 estimate. Food, seed and industrial use was projected at 6,625 million
bus, up 40 million bus from July and up
70 million bus from 6,555 million bus this
year. Included in the category was use of
corn for ethanol at 5,250 million bus, up
25 million bus from July and up 50 million bus estimated for this year, and 1,375
million bus for food.
Corn exports were projected at 1,850
million bus in 2015-16, down 25 million
bus from July and equal to the 2014-15 estimate, with increased competition from
Brazil and Argentina expected.
The effects of China's currency devaluation and late season weather were
keys going forward, Mr. Meyers said. He
noted that U.S. exports of distillers dried
grains were record high the past couple
of months, with most shipments going to
China. Reduced DDG exports could push
supply back into the domestic market and
reduce demand for corn and soybean meal,
he said. On the bullish side, drier weather
in August could reduce yields, especially
in states that had weather problems earlier. And he still expects a reduction in corn
harvested area in a later report.
"Not everything is bearish," Mr. Meyers said. MBN

U.S.D.A. reports send bearish
message on soybeans
KANSAS CITY - After months of drenching rains in the eastern Corn Belt - but
still many weeks before harvest - market
observers following the U.S. soybean crop
were surprised by August U.S. Department of Agriculture reports that
took apart assumptions that had
been guiding the futures market
higher. Chief among them were
expectations of lowered yields
and acreage because of the wet
weather.
The first survey-based Crop
Production report for soybeans of
the season and the August World
Agricultural Supply and Demand Estimates defied widespread market expectations for downward revisions in soybean
yields and acreage stemming from an excessively wet growing season. Instead, the

U.S.D.A. raised both production and yield
forecasts compared with July trend projections while making a downward revision
in harvested area of less than 1 million acres
based on losses in Missouri. The immediate reaction by the soybean futures
market to the unexpected news
was to trade limit down.
The U.S.D.A. forecast soybean
production at 3,916 million bus,
down 1% from last year but 5%
higher than the average trade
expectation of 3,719 million bus.
Based on Aug. 1 conditions,
yields were forecast to average
46.9 bus an acre, down 0.9 bu from 2014
but up 3% from average trade estimates
of 44.6 bus an acre. Soybean 2015-16 ending stocks were projected at 470 million
bus, up 11% from 425 million bus forecast
bakingbusiness.com / world-grain.com

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Milling & Baking News - August 18, 2015

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