Ahead of the USDA’s latest report, farmers and analysts are keeping a close eye on the corn and soybean markets, trying to predict the new outcome based on the August yield numbers and different crop tours.
“The market feels we’re gonna have 20-70 million bushel increase in terms of old crop and soybean exports,” said analyst Rich Nelson of Allendale Inc. on U.S. Farm Report.
The USDA has forecasted 175.1 bushels per acre on corn, 11 percent more than 2015. Some analysts like Bob Utterback of Utterback marketing believes the corn markets will trend towards 173 or 174 bpa. For the last 20 years, the USDA doesn’t adjust its forecast numbers until the final number. For 11 of those 20 years, the numbers in the final report show greater corn numbers than in August, statistically showing the odds favor corn crops increasing.
On the soybean side, USDA predicted record-breaking soybean yields as well: 48.9 bpa. Yields aren’t going to be much of a problem, said Nelson. There are old crop supply issues, especially with soybeans.
“I think the issue is really solving this from a supply base standpoint, which is what the market wants to see,” said Nelson. “We can address the longer-term issues as far as world soybean issues.”
However, it could be likely farmers see yields surpass the USDA’s prediction for soybeans.
“[Some] beans are so tall, they’ve almost fallen over because they have so many blooms,” said Utterback. “I lean toward 50-51 bushels to neutralize the exports.”
According to the USDA report, farmers are expected to harvest 94.1 million acres of corn and 83 million acres of soybeans.