Tag Archives: WASDE

Perhaps circling the drain even faster than the likes of black rhinos, whooping cranes and snow leopards, small-town newspapers represent a particularly sad and endangered form of business. Some remain securely on life-support thanks to legal notices required by small-county seats. Yet virtually none of this journalistic remnant truly sports a recognizable DNA.

For several generations before the cancerous growth of the internet, a sure measurement of town quality was the reliable collection and presentation of local news via a daily or weekly rag. Furthermore, fact-checking and extreme timeliness was almost beside the point. Truthfulness was important, but not quite as valued as the regular creation of the community’s narrative and context.

Tapping the archives of my own newsstand, the wonderful example of the long-defunct “Polk Progress” always comes to mind. Written and published by a thoughtful man named Norris Alfred, this unique gazette was one of the last linotypes in central Nebraska to rattle out interesting copy every Friday.

Once nominated for the Pulitzer Prize in 1980, Alfred was a great writer, possessing more heart than nose for news. My favorite pages included columns on bird-watching, random events of hospitality (e.g., “Miss Claussen served cousins from Rising City lemonade and rhubarb pie on Sunday afternoon.”) and last week’s weather.

Yet the one element of newspaper layout that will be forever emblazoned, in my memory, is the definitive masthead. Below the bold letters of the tabloid’s centered name sits a large snail, one particularly sluggish given only the token hint of a slime trail. Apparently moving from left to right, the snail lethargically pulls himself toward the “Progress'” slogan: “SLOWER IS BETTER.”

Needless to say, it’s impossible to ever imagine this phrase in the unabridged vocabulary of Tim Cook, Jeff Bezos or Mark Zuckerberg. Indeed, many entrepreneurs, consumers, professionals, workers, scientists and politicians would find such a bizarre value-assessment as a damning indictment of our entire culture.

Please don’t prattle on about the danger of snap judgments, the reward of protracted deliberations and the irresponsibility of decision-making on the run. Spare us the inconvenience of thinking before we act, of doubting that our first blush could be dead wrong, and of wondering if wait and see could be the wisest strategy.

The 21st century was built for speed. Let us stumble forth with alacrity.

As you can probably tell, I can’t completely remove tongue from cheek when discussing the modern world’s speedy success story. I do think the way Alfred’s “Progress” (no doubt meant with at least a little irony) esteemed a more measured pace of life and contained more wisdom.

In fact, I’ve always questioned speed per se (especially if it comes at the expense of thoughtful deliberation) as a worthwhile tool in the critical process of price-discovery. My anxiety in this regard has significantly intensified in recent weeks, ever since USDA announced its decision to change the way it would release major report data, essentially abandoning the “lockup” procedure that has well served producers and speculators for decades.

For years, USDA has given news organizations embargoed copies of market-moving reports an hour and a half earlier than the reports are released to the public.

While members of the media cannot publish any of the data until the official public report is released, the 90-minute blackout has always allowed plenty of time for fact-checking, correcting math errors and the composition of meaningful context.

As sensible as that may sound, the historical system is no more. Crop reports and new supply and demand tables to be released on Friday will be tossed to the unprepared trading mob like so much red meat to hungry but confused lions.

So why did Ag Secretary Sonny Perdue and his unthinking minions suddenly become obsessed to fix what wasn’t broken? In short, the USDA team was motivated by unproven and rather farfetched allegation that high-speed fiber optic lines — that are slightly faster than the speed at which USDA uploads the information — had created an unlevel playing field.

“There is evidence to suggest that there is significant trading activity worth millions of dollars that occurs in the one or two second period immediately following the official release of reports, which could not be based on the public reading of USDA data,” USDA said in a statement. “The inference is that private agents are paying the news agencies for faster data transmission to get a jump on the market.”

Before going further, let me stipulate that DTN is one of the news agencies previously allowed to examine and frame official data 90 minutes before the official release. Secondly, I think my coverage over the years clearly indicates that I am generally a defender of the government data collection ability and procedure. I’ve never had a predictable desire to beat a dead horse in that regard, a sport that has often been overplayed, in my opinion.

Yet this is one carcass that is beginning to smell. USDA has made a blunder here, a mistake that I fear will cause more problems in terms of market volatility and credibility than it ever hoped to solve.

At least two things bother me as USDA attempts to become a quick-change artist. First, there seems to be a serious lack of evidence to justify abandoning a time-tested procedure. Secretary Perdue loosely talks about “evidence” and “inferences.” But while the implications are rather insulting, the department shows no interest in following regular procedures of investigation and public comment.

Second, I think the change reflects yet another example of being drunk on the importance and effectiveness of speed per se. I think all producers and traders can cite contrary market moments when advanced knowledge of USDA data proved to be illogically expensive.

Call me a yokel from the backwoods who likes to read old newspapers, but don’t marketers have more of a fighting chance if they break both twittering thumbs, take about five deep breaths and embrace the broader context before issuing buy or sell orders?

OMAHA — USDA pegged the national average corn yield at 178.4 bushels per acre (bpa), higher than last month’s 174 bpa estimate and the average pre-report estimate. That bumped up estimated production to 14.59 billion bushels, 356 million bushels higher than last month’s 14.23 bb estimate.

Soybean yield and production were estimated at 51.6 bpa and 4.59 billion bushels. Both figures exceeded the range of pre-report expectations.

The crop estimates were released today in USDA’s World Agricultural Supply and Demand Estimates and Crop Production reports. These August reports are the first of the 2018 season to take into account field surveys conducted by USDA in July.

Friday’s new U.S. ending stocks estimates were bearish for corn and soybeans and neutral for wheat, said DTN Analyst Todd Hultman. Friday’s world ending stocks estimates from USDA were bearish for corn, soybeans and wheat, he said.

Today’s reports also mark the first time in decades that DTN and other news outlets did not have pre-release access and are receiving the data at the same time as the general public, at 11 a.m. CDT. You can access the full reports here:

Crop Production: https://www.nass.usda.gov/…

World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

For DTN’s exclusive audio comments on today’s reports, visit: http://listen.aghost.net/…

CORN

If USDA’s 178.4 bpa corn yield is realized, it will set a new record, even though production is expected to be 1% lower than last year at 14.586 billion bushels.

USDA adjusted new-crop (2018-19) corn ending stocks to 1.68 billion bushels, up 132 mb from its July estimate of 1.55 bb. USDA boosted feed and residual use by 100 mb and exports by 125 mb, resulting in 225 mb of higher expected use.

USDA lowered the range of average farm gate prices at $3.10 per bushel to $4.10 per bushel.

Old-crop (2017-18) ending stocks came in at 2.03 billion bushels, the same as last month’s estimate of 2.03 bb.

Globally, USDA pegged new-crop ending stocks at 155.49 million metric tons (mmt), up 3.53 mmt. Production increased by 6.75 mmt overall, with most of the gain coming from the U.S. USDA lowered Brazilian production by 1.5 mmt and EU output by 1.7 mmt.

World ending stocks for corn came in at 193.33 mmt. Brazilian farmers are expected to harvest 94.5 mmt, while Argentine farmers are set to haul in 41 mmt.

SOYBEANS

Soybean production is forecast to increase 4% from last year to 4.59 billion bushels.

USDA’s new-crop ending stocks estimate, at 785 million bushels, exceeds pre-report expectations by more than 205 million bushels. USDA boosted its crush estimate by 15 mb and exports by 20 mb.

Old-crop ending stocks came in at 461 million bushels, a shade lower than last month’s 465 mb. USDA also cut old-crop export estimates by 25 mb.

USDA estimated the average range of farm gate price at $7.65 to $10.15 per bushel, down from last month’s range of $8.00 to $10.50.

World ending stocks for new-crop soybeans came in at 105.94 million metric tons, up 7.7 mmt, driven mostly by higher U.S. production. Stocks of old crop were pegged at 95.61 mmt. USDA left Brazil and Argentina production unchanged at 120.5 mmt and 57 mmt, respectively.

WHEAT

USDA expects the 2018-19 wheat crop to reach 1.88 billion bushels, down less than 1% from last month’s forecast, but up 8% from last year. Winter wheat is expected to account for 1.149 billion bushels, down 6% from last year’s 1.27 bb. The average winter wheat yield is estimated at 47.9 bpa, down 2.3 bpa from last year’s average. Hard red winter wheat production, at 661 million bushels, is up 1% from last month while soft red winter is down 4% from the July forecast at 292 million bushels.

The spring wheat crop is estimated at 614 million bushels, up slightly from July’s estimate and up 48% from last year. If realized, it will be the third-highest production on record. USDA expects farmers to harvest a national average yield of 47.6 bpa, a new record.

Domestically, new-crop ending stocks for wheat came in at 935 million bushels, 50 mb lower than last month. While USDA made a number of changes to supply and demand, the largest was a 50 mb increase in exports. USDA pegged old-crop ending stocks at 1.1 bb.

USDA increased the range of farm gate prices by a dime on both the high and low ends to $4.60 to $5.60 per bushel.

Global new-crop ending stocks for wheat came in at 258.96 mmt, while old-crop supplies were estimated at 273.07 mmt.

Editor’s Note: Join DTN Analyst Todd Hultman at 12 p.m. CDT on Friday, Aug. 10, as he evaluates USDA’s latest production estimates for the U.S. 2018-2019 crops as well as old-crop and new-crop supply and demand tables. To register, visit https://dtn.webex.com/…

U.S. CROP PRODUCTION (Million Bushels) 2018-2019
Aug Avg High Low July 2017-18
Corn 14,586 14,417 14,740 14,210 14,230 14,604
Soybeans 4,586 4,428 4,576 4,354 4,310 4,392
All Wheat 1,877 1,850 1,900 1,700 1,881 1,741
All Winter 1,189 1,181 1,201 1,050 1,193 1,269
Spring 73 600 633 570 614 416
U.S. AVERAGE YIELD (Bushels Per Acre) 2018-2019
Aug Avg High Low July 2017-18
Corn 178.4 176.3 180.2 173.8 174.0 176.6
Soybeans 51.6 49.8 51.5 49.0 48.5 49.1
U.S. ENDING STOCKS (Million Bushels) 2018-2019
Aug Avg High Low July
Corn 1,684 1,630 1,812 1,457 1,552
Soybeans 784 641 742 550 580
Wheat 935 959 1,018 813 985
U.S. ENDING STOCKS (Million Bushels) 2017-2018
Aug Avg High Low July
Corn 2,027 2,016 2,137 1,900 2,027
Soybeans 430 461 507 437 465
Wheat 1,100 1,099 1,100 1,080 1,100
WORLD ENDING STOCKS (Million metric tons) 2018-2019
Aug Avg High Low July
Corn 155.49 152.20 158.20 146.00 151.96
Soybeans 105.94 99.30 101.70 94.00 98.27
Wheat 258.96 255.60 259.90 248.00 260.88
WORLD ENDING STOCKS (Million metric tons) 2017-18
Aug Avg High Low July
Corn 193.33 190.80 192.60 188.00 191.70
Soybeans 95.61 95.80 97.00 92.00 96.00
Wheat 273.07 273.00 275.00 271.00 273.50
WORLD PRODUCTION (Million Metric Tons) 2018-2019
2018-19
Wheat Aug July
European Union 137.50 145.00
FSU – 12 122.54 121.24