The focus has turned to soybeans, which still have a chance to build on current yield estimates. Analysts will be watching the corn numbers as well when USDA releases its World Agricultural Supply and Demand Estimates on Sept. 12, but the soybean yield will be the most closely watched number on Thursday.
"The only thing of importance will be the soybean yield," says Rich Nelson, chief strategist with Allendale, a brokerage firm based in McHenry, Ill. The corn yield will remain bearish, and December corn futures could retest August lows, he adds.
Allendale's producer survey of 34 states, conducted from August 19-30, showed an average soybean yield of only of 39 bu. per acre, which is substantially lower than USDA’s August estimate of 42.6 bu. per acre. The firm puts total soybean production at 2.98 billion bushels, well below USDA’s August estimate of 3.255 billion bushels.
Swiss-based Informa projects the average soybean yield at 42.4 bu. per acre and soybean production at 3.239 billion bushels.
The average trade estimate puts the soybean yield at 41.2 bu. per acre, with a range of 39 to 42.4 bu. per acre.
"Based on rainfall, this year is almost exactly like 2003," says Nelson. "The soybean yield could actually be under 2003’s." Looking at Des Moines, Iowa, rainfall for July and August, in 2003 the area had 3.2 inches of rain, Nelson says. This year, over the same two-month period the Des Moines area only had 2 inches of rain.
"In 2003, we had the same wet spring we had this year, a normal June, and in July rainfall collapsed just like it did this year," notes Nelson. He expects USDA to decrease the yield to near the average trade guess in Friday’s report, reducing it further in October.
By the end of the growing season, though, Nelson expects the actual soybean yield to be closer to 38 bu. per acre.
Chad Hart, Iowa State University agricultural economist, compares this year to last year, saying if it starts to rain this fall like it did in 2012, the U.S. average soybean yield could improve just like it did last year.
"Beans have more time," says Hart. "With late season rains, we could make a good soybean crop." Last year, the average U.S. soybean yield came in at 39.6 bu. per acre. Trend yield is about 44.5 bu. per acre. With fall rains, Hart thinks the soybean yield could improve to between 41 and 42 bu. per acre this year.
Corn Crop Essentially Made
Despite the fact corn is now just trying to hold onto its yield, trade estimates for the U.S. average corn yield are wide, ranging from 150.2 bu. per acre to 157.2 bu.
Informa’s yield is at the top of the range at 157.2 bu. per acre versus USDA’s August projection of 154.4 bu. The forecasting firm puts corn production at 14.013 billion bushels, much higher than USDA’ latest estimate of 13.763 billion bushels and nearly 1 billion bushels or 7 percent higher than 2009’s record 13.09 billion bushels.
Allendale’s producer survey shows an average yield of 153.4 bu.per acre for corn, which is a bushel per acre lower than USDA’s August estimates. The survey also suggests a U.S. corn crop of 13.676 billion bushels, still well above the previous record.
Hart says he’ll also be watching the corn export numbers and the feed demand numbers when USDA releases its September report.
"We are seeing a significant pick up in exports because of China," says Hart. Pork and poultry are already expected to increase their use of corn. "I’m waiting to see if beef picks up," he adds.