Big shift coming in 2014 crop mix?
Sep 20, 2013
Hello Pro Farmer Members!
We're well aware some of you are not going to be happy that we're sticking with our national average corn yield estimate of 154.1 bu. per acre. But we've got to stick with what we think we know, and like we explained in this week's newsletter we think there are enough ears out there to support our yield estimate. The reason we remain below USDA's corn yield estimate of 155.3 bu. per acre is because we see average ear weights declining a bit from when USDA surveyed for the Sept. 1 yield estimate.
What we won't see is another big-time increase in the number of ears per acre. That should be set for remaining yield estimates.
For soybeans, it was time to reflect what you've been telling us... what our eyes are telling us... and what weather conditions were telling us. That's why we knocked a bushel off the national average soybean yield this week, to 40.8 bu. per acre.
After running through the new certified acreage data from FSA, we also decided we had to adjust our harvested acreage estimates. We added some acres to both corn and soybeans. The end result of the steady yield estimate, but higher acreage estimate for corn was a 40-million-bu. increase in out crop peg to 13.5 billion bushels.
For soybeans, the increase in harvested acres was more than offset by the lower yield estimate and we ended up with a crop peg of 3.097 billion bushels.
Our soybean crop estimate is 52 million bu. below USDA's current bean crop estimate. If this crop estimate is plugged into USDA's S&D balance sheet and no changes were made to any of the usage categories, carryover would drop to 98 million bushels.
That's not going to happen... USDA might drop the crop to 3.097 billion bu., but the smaller supply would be at least partially offset by lower use and (theoretically) a higher price projection. The problem is USDA's current total demand estimate is already at 3.14 billion bu., which is 15 million bu. less than used in the 2011-12 marketing year and only 41 million bu. more than used in the record-price-setting 2012-13 marketing year. So, if the market is forced to slow down use enough to hold carryover even steady at 125 million bu., it will take prices higher than currently factored into prices.
It's not to early to start looking at the 2014-15 marketing year
Informa Economics, Inc., today reportedly released its acreage updates. The full release reportedly included Informa's projections for 2014 plantings with corn at 92.7 million acres (USDA is at 97.4 million for this year) and soybean plantings at 83.6 million (USDA is at 77.2 million for this year).
Those big shifts (down 4.7 million acres on corn plantings and up 6.4 million acres on soybeans from this year) are what the market is telling us for the 2014 crops. We're having a tough time knocking back corn acres that much from current levels as we look out into the 2014-15 marketing year, but the economics of the markets certainly suggest a major turn in crop mix is ahead for next year.
That's it for now...
... be sure to check out the video clips of my sky-scouting trip over northeastern Iowa and southeastern Minnesota earlier this week.
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