Market analysts anticipate USDA to raise their estimate on the U.S. soybean yield on Friday, with farmers generally reporting higher yields as fall harvest pushes north.
As of Oct. 4, soybean harvest was 42% complete compared to the 5-year average of 32%, according to USDA, with Illinois at 49% harvested, Indiana at 41%, Iowa at 32% and Minnesota at 69% harvested. Meanwhile, 73% of the U.S. soybean crop was rated good-to-excellent, up from the prior week’s rating of 62% good-to-excellent.
“You have to argue that with the soybean number, the door is certainly open for a bigger yield number,” says Joe Vaclavik, president of Standard Grain. “You’ve got some good yield reports, we’ve had good crop ratings all summer and into fall, and we saw another increase in crop ratings Monday. And, given the fact that USDA raised their soybean yield number in September, the possibility is certainly there for at least a higher number.”
In their September crop report, USDA raised their soybean yield estimate for the 2015-2016 crop to 47.1 bu./acre, up from their prior estimate of 46.9 bu./acre.
In a recent survey of industry analysts released this week, Reuters reported an average trade guess on soybean yield of 47.2 bu./acre.
Brian Roach, president of Roach Ag Marketing, agrees that USDA will likely continue the trend of raising soybean yield in this month’s report based on encouraging yield reports from farmers. “My expectation in beans is that we could add half a bushel to the bean yield because of our early numbers from our customer surveys,” says Roach. “What we’re seeing is the bean yields in the tougher areas of the eastern Corn Belt are not as bad as previously thought.”
Historical trends also lean towards USDA raising soybean yield for the October report, according to Brian Grete, editor of Pro Farmer, speaking on Tuesday’s broadcast of Market Rally.
Over the past 20 years, USDA raised soybean yield 13 times from the September estimate to the final estimate while lowering the estimate only seven times, Grete pointed out. However, with so much of the late-planted soybean crop in eastern Corn Belt states like Indiana still green and trying to add yield, Chip Flory cautioned against betting on higher soybean yields.
“We’ve got a quarter of that crop that was planted way late--maybe as much as a third of the crop,” said Flory, the host of Market Rally and editorial director of Pro Farmer. “It’s green as a gourd. It looks more like the first week of September than the first week of October on those late planted beans. They’ve got a lot of work to do before they can finish up and put a good yield on--and it’s dry.”
Corn Yield Remains Wild Card
Pegging the corn yield estimate for this year’s crop has been a moving target, Flory noted in Monday’s Market Rally broadcast, with yield estimates during harvest being highly variable. On Monday, USDA reported that 27% of the U.S. corn crop was harvested, compared to the 5-year average of 32% with Iowa 13% harvested, Indiana at 29% and Illinois at 50% harvested.
“The yield reports are still all over the board. Even individual farmers are talking about a wide spread in corn yields this year,” Flory noted. “That’s going to make it really difficult to put a lot of faith in the crop estimate that we get from USDA at the end of the week.”
In the September report, USDA dropped their yield estimate for the 2015-2016 corn crop to 167.5 bu./acre, down 1.3 bu/acre from their estimate the month prior.
Given the reduction in USDA’s corn yield estimate in the September, Roach anticipates USDA will likely continue with further reductions in the October report.
“I would expect that the trend in USDA numbers from their August report into the October report will remain the same, and that is the USDA will continue to pull down their yield numbers in corn,” Roach says, pointing out that corn yields are not as good in the eastern Corn Belt where heavy rains earlier this season delayed planting and leached nitrogen from fields.
Reuters' survey this week pegged the corn yield at 167.1 bu./acre, down 0.4 bu./acre from USDA’s September estimate.
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